Wednesday, March 26, 2008


Recently I have been thinking alot about my job and whether I am going to be stuck here in the same position forever. I haven't been in my current position for two long (a little over a year and half). However, I find myself worried that it's not giving me the kind of experience that will make me valuable for other positions either with this company or other companies. I work for a mutual fund company working on reporting for the funds. I basically work up all the financial statements, portfolios, annual and semi annual reports for a group of funds owned and managed by my company. I like my job. It's interesting.

However, currently there are only 4 staff working in my department. There are 3 managers. One of the staff has been here and in the same position for 8 years. I know she is very frustrated that she can't get a promotion to some sort of management level. I can picture myself in the same situation 6 years from now. Still working in the same department as a staff. That has me worried. I don't want to be CEO of a company. However I do want to be successful. I feel that moving up into middle management and taking on more responsibility is a sign of success. Higher pay also helps. My concern is that with the type of work I do, there is not alot of demand in my city. There are two big mutual fund companies that I know of where I live. Other companies accounting departments are looking for people with mutual fund accounting experience. Therefore I don't see how I could expect or hope to move up the career ladder either with my current company or a different company. I guess my main concern that I don't want to be stuck in a dead end job.

Today there was a job posting for a tax associate in my company. The position is a staff position working on the tax aspect of the mutual funds owned by my company. I'm considering it. The reasons I'm balking at applying for the position are that I'm not sure if it would get me anywhere. Would I be exchanging one dead end staff position for another? Or would this position offer the kind of experience valuable to other companies? Could this position possibly lead to a higher up position in the future? Another reason for balking is that I don't even know if I would like the position. I'm fairly happy doing what I currently do. What if I switched jobs and hated it? The job description doesn't give me a great idea of what they do. The responsibilities are listed but they don't give you a great idea if you haven't worked in that type of position before. I am going to mull this all over in my head today and tomorrow and see where I land. In life you must take chances. Time will tell if I make the right decision.

Warning to My Readers

I just wanted to send out a warning to anyone who reads this blog that I am not a financial advisor. I do not claim to be a professional when it comes to finances. This blog is not intended to be used as a guide to others and my advice is not for you to follow. If you do follow any advice given on this blog then you do so at your own risk.

This blog is merely about my own personal journey through the world of finance. It is about my quest to pay down debt, save for retirement, and any other financial aspects of my life. I don't claim to have all the answers. I don't claim that my way of doing this is the best way. It does seem to be working for me but may not work for everyone.

I just wanted to make sure I warned everyone because I recently received an anonymous comment stating that I was wrong in my financial advice. In my post on my review of how my 401k performed in 2007 I stated that I had earned 7% in 2007. I stated that I had only invested in my 401k for the last 3 months of the year and that if you annualized my returns I would have earned about 28%. However, a commenter decided to correct me and state that had I been invested the whole year I would have only had a return closer to 6-8%. I still believe that 7% over 3 months annualized comes out to 28%. However, to make this commenter happy I would like to state that if I had invested in the same 3 funds all year last year my return would have been just over 18%. Not the 28% annualized I stated. Also well better then the 6-8% the commentor stated. If the funds did as well all year as they did in the last three months then I would have had 28%.

Anyways, the point of this post is to take everything I say with a grain of salt. I don't want anyone thinking I am a financial advisor giving out advice. I am not. I don't know what investments are the best out there. I do know what is working for me and my fiance. If you want to follow us on our journey then keep reading. I appreciate my readers.

Taxes, Wedding Savings, House Appraisals and More

I haven't posted in awhile because thier hasn't really been alot going on recently. We filed my fiances taxes about a week and half ago. She will be getting refunds from federal and two states. She owes $8 to a third state which she worked in for probably 2 or 3 weeks total this past year. Anyways, we used turbotax and the federal was really easy. The state part was a bit confusing. It didn't help that we moved mid way through the year and crossed the state line. Hopefully we got it right. So she recieved her 2 state refunds via direct deposit last week and we moved that money into our wedding fund. So the wedding fund has increased a total of $750 this month with contributions! I think that's a pretty good month. When we get her federal it will also go to the wedding fund.

I got a call from the bank that is doing our mortgage this morning to let me know they got the appraisal done on the house. We are purchasing the house for 162k and they appraised it for 168k. So that sounds pretty good to me. I have heard that the bank appraisers usually go lower then what the house would be appraised for by someone you personally hired to do it. But for now we'll stick to this appraisal's value.

On the insurance front, we have decided to switch our insurances to Traveler's Insurance. After getting quotes from Nationwide, Allstate, Farmers, StateFarm, Shelter and Traveler's, Traveler's worked out to be slightly cheaper then the next closest and so we decided to go with them. We will be saving almost $600 a year in car insurance which will come close to covering the homeowners insurance. This is because we will get the discounts for having all our plans with the same company. Good news!

Tuesday, March 18, 2008

Fed Rate Cuts and Me

The Fed made an emergency rate cut over the weekend of .25 points and are expected to make another cut today possibly up to a full point. What does this mean for me? Well I found an article on yahoo that kind of helps explain what I can expect for these rate cuts.

Many people think that as the Fed cuts rates, mortgage rates also go down. This is not the case. With the Fed rate cuts comes expected inflation. The mortgage rates won't go down because the investors who buy these mortgages are not likely to want to lock in a low rate with higher inflation expected down the road. And the investors are the ones who supply the money to be loaned out to those of us looking for a mortgage. Thus, I can't hope that this rate cut will help my fiance and I get a lower mortgage rate when we close on our house in April. Mortgage rates have been fluctuating around 6% since September 2007 when the Feds began cutting rates. I don't expect that to change much by the time we lock in our mortgage in a month.

People with credit card debt hope that a cut in the Fed funds rate will help drop thier interest rates on thier credit cards. Not the case. Even with a reduced rate from the Fed does not mean credit card companies have to pass that rate on to you. You need to call your credit card company and try to get a reduced rate. For me personally we have paid off all our credit card debt and this is not a concern.

The Fed rate cuts can hurt your savings. Many savings products rates are dropping at a very fast rate due to the rate cuts. An online savings account I opened about a year ago earning me 5% is now earning me slightly above 3% and probably going to fall lower if the rates get cut today. CD's at banks are following the same trend.

So does someone want to help me out? I don't see how the cut in the Fed Funds rate is going to benefit me personally. It will benefit the big banks who are having liquidity trouble and need to find ways to borrow money at a low rate, but I personally won't see the benefit. Am I wrong? Let me know what you think.

Savings Updates!

This past weekend I went ahead and transferred some money from checking into our wedding fund and our emergency fund. This month we were able to save $500 into our wedding fund. We were also able to save $800 towards our emergency fund. We decided to save more into our emergency fund because the money we need for closing costs for the house will come from this account. Once the end of the month hits I will know how much we were under budget. Currently it looks like we will be about $300 under budget which we will also put in our emergency fund at that point.

Also this weekend we completed filing my fiances taxes. Once all was said and done she will be getting refunds totaling just over $1,000. We will probably divide this money up between the wedding and emergency funds.

On my run yesterday I was doing some math in my head. I figured up that at our current savings rate we should be able to have about $11,000 in our wedding fund when it comes time to pay off everything we have yet to pay for such as catering and photography. Hopefully along with some help from my fiances parents this will be enough to cover everything and we won't have to dip into our emergency fund to pick up any slack. I also figured that if we save the rest of the year like we did this month that our emergency fund should be close to $25,000 by the end of the year. This is not including any money we can hope to get for our wedding which I'm sure some will go towards this goal. I also did not take into account the tax stimulus of $1,200 we should also be recieving in May. Thus, I was feeling pretty good on my run both physically and mentally. I feel like we are in a good position to end this year off in a good position with our wedding paid for in full and our emergency fund to the point we want it. That will put us in good position to work towards more exciting goals in 2009.

Monday, March 17, 2008

If You Were Debt Free!

Today I read a post over at Apples and Telephones that got me to thinking. The author is debt free and most of the personal finance books she has read focus on getting out of debt. She mentions Dave Ramsey who it seems focuses completely on getting out of debt. I feel this is because this is the biggest and most important step in his plan. Also, most of Ramsey's audience is probably in debt which is why they are looking for help. The author of Apples and Telephones states that she has no debts and therefore does not quite no what to do. She has no big goals to aim for such as becoming debt free.

For me, once my fiance and I are debt free we will have a plan. I've thought about this many times before. I am considering having all our debt besides the mortgage paid off as being debt free. I think once we are at this point we will be in a good position to save.

We currently save for retirement but once we have no debt we will be able to save a higher percentage of our salaries. I believe that it is very important to save as much as you can towards retirement close to 15% of your salary.

Once we are debt free except for the mortgage we will start paying off the mortgage at an accelerated rate. We don't want to carry a mortgage for 30 years. Hopefully if things go well we can get it paid off in 20 years or less.

We will have our emergency fund built up to 6 months of expenses and we will focus on keeping this at 6 months worth of expenses in a safe online savings account that hopefully earns us a higher rate of return then a regular account at a brick and mortar bank.

At this point we will save for things we want. We will have different accounts saving for new cars when the time comes to replace our current cars. We will save for vacations we want to go on. We will save for anything new we would like.

Last we will be saving into a couple of mutual funds through my company (a mutual fund company) for our futures. We will be saving to build wealth. For us the ultimate goal is building a large amount of wealth where we can feel comfortable financially. An amount of wealth where we will not be concerned with any emergencies that may arise. An amount of wealth where we can feel comfortable donating large amounts to charity. An amount of wealth where we can feel free to experience different things we would like to experience such as world travel.

I feel that once you have become debt free the journey has really just begun. At that time it is time to really save for your future. Enjoy the now but also save so you can really really enjoy the future!

Friday, March 14, 2008

Are you Scared of a Recession?

There has been a lot of talk lately about our economy slipping into a recession. From all the talk you might start to worry that we are heading for a repeat of the great depression. Lots of bleak terrible sounding data that can definately make you worry. So, are you scared of a recession?

I personally don't know what to make of all the talk. All I know is my fiance and I's personal situation and I can comment on what we are doing and why we aren't to worried about a recession.

My fiance and I both have fairly stable jobs. We don't feel disposable because we both hold jobs where they honestly need to hire more workers to get all the work done. Also, our work is required by the SEC. Thus, if we don't get our work done, the companies are going to be required to pay some hefty fees to the government. But you never know. We could be out of jobs tomorrow but we certainly hope not.

We have a nice emergency fund built up. It's not as high as we would like but well over 3 months worth of expenses. We will use some of that money to pay for our part of the closing costs for the purchase of our new home. But, we plan on putting some extra savings towards that account over the next couple months to boost it up.

Our retirement funds may not get a good return. However, we are both soo far away from retirement it's not even funny. We just started our careers and have at least 30 years before we could even think about early retirement. We have 40 years before a regular normal aged retirement. Therefore, we will keep funding our retirement at our current rates and hope for the best.

The only worry I have is with the purchase of our house. It's a big purchase. We did the math and have plenty of room in our budget for the monthly mortgage, insurance, and taxes. We also have plenty of room left over for savings. We just have to make sure we don't go crazy when we move in and buy a bunch of new furniture and items we feel we need while sacrificing savings. With our upcoming wedding, we will register for most of the stuff we feel we need. Hopefully we won't have to buy anything when we move in.

So what about you? Does all this talk about recession have you worried? What are you concerned about or why aren't you concerned? Is there anything you are doing to try to help yourself be in a better situation because you are scared of the recession? Or are you just continuing along with life with no fears?

Thursday, March 13, 2008

Shopping for Insurance

With the contract on the house and closing in mid april my fiance and I decided to do some shopping around for insurance. We want to get the house covered under a homeowner's policy and put both our cars on the same plan.

Today I submitted online requests to be contacted so that I can get quotes. I contacted 5 different companies and we will also get a quote from the current insurance company we use. We will compare the same coverages from the different companies and choose the one that will be cheapest for us.

I've heard back from 2 of the companies contacted and have given them some information. There was some information I did not have such as vin #'s on the vehicles and my fiances personal info. like drivers license number. I will get that information tonight from her so I am prepared tomorrow. We will try to get these quotes together this week and next and have a decision made by the end of the month. I believe by buying a homeowners policy with the same company we have auto through will get us a good discount on the auto insurance and hopefully our car insurance will be less then it currently is. Once I have all the quotes I'll do a post about which companies I contacted for quotes and the range of quotes we recieved.

Finally! An Agreement Reached!

We finally reached an agreement with the sellers of the house last night for good! After our inspection we realized there were some problems with the drainage in the backyard causing water to pool up on a side of the yard when it rains alot. In the midwest we get alot of water through the winter and spring so this was a concern of ours. We didn't want a pool of water in our backyard for half the year. We want to be able to play in our backyard with our dog. We don't want concerns that the pooling of water could cause foundation problems in the future. Thus, we were set on making sure this issue could be fixed and that the sellers were the ones to have to pay for the solution.

So, we recieved 4 estimates on what it would take to fix the problem. Most all of them were using a drainage system that would bring the water around the side of the house and out the front yard into the street. The estimates ranged from $1,650 to $6,665. The $1,650 came from someone the sellers wanted to get to do the work. We did not like this solution. We did not know if they were just friends that would do a quick fix so the seller could pay as little as possible. They weren't an actual company from what we could tell.

Thus, we decided to take the $1,650 that the sellers were willing to pay in an eschrow account. We will use our company which gave us a bid of $2,600 and a one year warranty that the solution would work. We will pay the difference ourselves.

So with that taken care of we have an agreement and a house will be ours in mid April! It is a scary ordeal. We will be a homeowner and all the costs that come along with home ownership will be our responsibility. The house is wonderful and I can't wait to get the keys and be able to move in! The next concern on our list is getting our current residence rented out so our landlord will release us from the lease. Hopefully we can get that taken care of within the next month!

Tuesday, March 11, 2008

All Major Bills Due Beginning of Month!

The other day I was going over our budget and our checking account and freaking out. My fiance and I try to keep a minimum of $1,000 in our checking account. That may be high but that's the level we both agreed we would feel comfortable with so that's where we try to keep it.

The problem is that all our major bills are due at the beginning of the month. So we get paid at the beginning of the month and our bills such as rent, credit card, 2 cars, and other smaller ones are due before we get our second paychecks. I realized this month that this brings our checking account balance down very low to a level we are definately not comfortable under $300. We will get paid again mid month and there will be a couple bills to be paid but a majority of those paychecks will go towards our different savings goals and we will end the month off with exactly $1,000 in our checking account.

Right now I am wondering if we shouldn't end the month off with closer to $1,500 in our checking account so that mid month we don't get below $500. Or does it really make a difference? We have plenty of money in our savings that we can transfer over if needed to pay a certain bill if we do get close to running out of money in our checking account. I feel as long as I keep good track of how low my checking account balance goes and make sure I don't overdraw on funds I should be alright. It is really only about one week out of the month where that balance is well below our $1,000 comfort level anyways.

I think we will continue to do what we currently do and if things get to tight we can transfer some of the money over from savings. I wish that our bills were more spread out. The current situation makes me sad at the beginning of the month but very happy towards the end. This is because I'm paying out a bunch of checks at the beginning and then only at the end do we get to see our savings going up.

Sunday, March 9, 2008

Run for the Money

I read a small article in the January 2004 issue of Runner's World titled "Run for the Money" the other day. The article was about a study from Ball State University where they studied 336 small business owners who either ran or lifted weights regularly to see if there was a correlation between exercise and business success.

The study found that running had a positive effect on sales volume, external goals such as wealth and family security, and internal goals such as recognition, challenge, accomplishment and independence. Weight training was positively linked to external and internal goals but not sales.

I'm not sure if this study necessarily shows that by running you become better and more successful in business. I think that runners are very goal oriented people and goal oriented people tend to be the most successful. Either way I think this is a positive article for exercise. I would recommend that everyone start exercising in some way. My chosen way is through running. A lot. I've been a runner since I was 12 years old and although I'm not sure I wouldn't be where I am today if I didn't run, I don't think it hurts. Not that I'm super successful but I feel I'm getting along pretty good for myself in my life.

Friday, March 7, 2008

Home Inspection

We had the inspection on the house we are considering buying on Tuesday and most everything turned up good. There was one problem with drainage in the backyard and what looked to be a little problem has turned into a very big problem. The inspector, who is a family friend, expressed to us his concern that the back yard had very poor drainage and water was and would continue to pool in the backyard making the back yard unusable and putting too much pressure on the foundation. He recommended calling a company that does drainage work to figure see if there was anything to be done to fix the problem.

So Wednesday the drainage company checked out the yard. I was not able to go because of work but the realtor went and she called and told us they thought it would be around $2,500 but were working up an estimate and would get that to her Friday. So today we got the estimate for a much larger number of $6,650.

For my fiance and I this is completely unacceptable. We are going to submit an offer for them to pay for this drainage system to be put in or we are going to drop the contract and move on to looking for a different house. Currently this is not our problem and if they are not willing to pay to have this fixed then we don't want to make it our problem. We have no pressure to move from our current location so we can keep looking and still be fine if we don't find a house for a few months. If we don't find a house in before June we will probably continue renting our current house.

This whole process has gotten frustrating. We are starting to feel like our realtor is just trying to get a sale and isn't looking for the best house for us. She makes little comments that I just don't feel comfortable with. I believe if things fall through with this house we will be looking for a different realtor as well. I'll keep you posted on what happens.

Wednesday, March 5, 2008

Paid Off Credit Card!

We did it! Yesterday afternoon I went online and paid the balance of my final credit card off. The balance was a little over $1,000. We used the proceeds that came from me selling my stock in an account that I basically am kidding myself with thinking I can make millions in. We also used some money that we had from going under budget last month! Thus, we are free from carrying a balance monthly on our credit cards.

Now we will only use my fiances credit card which we put groceries and gas only on and which we pay off in full each month.

So what to do with the money that was being budgeted towards paying down the credit card? Well, last month we budgeted $200 to be paid towards the balance of the card. In this months budget we have redirected that money to go towards saving for the wedding. With our wedding coming up in October we will need quite a bit of money to pay all the vendors the month or so before the wedding. After the wedding, the wedding savings will be redirected to emergency savings and paying down more debt (car loans).