Saturday, 5 March 2016
Jon Bear Journal: Money Management Past Reflections and Future Goals
Carlyn and I received a bit of a thought provoking challenge to discuss the money and credit decisions we face going into 2016. I hope that this can be a productive exercise for me and perhaps even informative or helpful to some of our readers.
When we're moving from young adulthood to adulthood Finances and Fun are not often two words that we associate with one another. For many of us, when we are young we have the support of our parents and learn the value of a dollar to varying degrees relative to the environments we grow up in. Finances might be associated with getting things, acquisitions, purchases and often times the things that make us happy. We do not always see the other side of finances when it's someone else who is dealing with those aspects. The bill paying, the taxes, the costs of schooling and medication. While we all know it's there it's just not in the front of our thinking.
Suddenly when we go out on our own for the first time, many of us are thrust into a Brave New World of money management. It's something that I struggled with for a long time. Now as an adult it is something I still struggle with. As I looked to 2016 one of the things I considered carefully was how to achieve various money goals. Some of them related to the fun things that I have wanted to do or wanted to purchase for some time now but others also focusing on more practical things or long term goals. The later not being so fun to think about, but certainly just as important as the fun things.
Piggy Bank Link
One way that I save money at my job is through an initiative with work where money is deducted from my paycheck each week and put away. In all practicality it's a simple savings account. But instead of an account with my bank, it's through my job. After one year the total of whatever amount of money I deducted each week is issued to me in a check by my work place plus a relatively standard interest rate (which in today's economy is very small).
I like the program because unlike with a savings account through my bank, I must go through a few more hoops to get the money if I want to take it out early. Therefore I tend to let it sit for the full one year term barring any emergencies that require me to deduct the money.
For the last 3 years now I have wanted to buy and desperately needed to buy a new computer but I never had enough money saved. Last year when the work place savings option was given to us I increased my weekly deductions from about $3.00 a week to $16.00 a week out of my check. My reasoning for increasing the deductions was so that this April when I got a much larger check then I had gotten in past years, I might be able to finally afford the new computer I so desired.
As it turns out, I was a little bit smarter about putting my own money away each week in 2015 too. Often times when I put that money away in the past I would blow it on buying presents at Christmas time for friends and family. This year I spent no less then I have in past years at the Holidays, but I did start saving in January of 2015 instead of midway through the year as I had typically done in the past.
Pizza (Umm...actually Pecan Pie but it looks like a pizza) and Whiskey Picture Link: Yum >.<
I saved by giving up the extra pizza night I might have had each month and by only buying the expensive bottle of whiskey that I like so much once every 3 months instead of once every month. By eating less pizza and drinking less whiskey it also helped me stay healthier in 2015. And really I was not giving up the things I liked, just having them much less often. I do feel like I enjoyed the pizzas and whiskey more too by moderating my intake.
The real prize though was that I was able to save enough money to buy myself a brand new computer at the end of this February, just a week and half ago now, and I was able to do so without even having to rely upon the money I will get in April.
I have also wished to visit my best friend and his family in Texas since they moved to Houston four years ago. I promised them the past 3 years that the next year I would save up enough money to go see them. I had never done that successfully though. Now with the larger sum of money I have saved through my workplace savings program and not having to spend it on a new computer I should be able to afford the plane tickets to finally make good on my promise.
So those are some of the fun rewards I have been and will be able to treat myself to this year because I have been a better money manager then in the past.
On the more practical side of things I have had money deducted monthly from my paycheck for the last 8 years now to save for retirement as part of the company 401k and retirement plan. The company was matching up to 6% of what I would take from my paycheck each week, so I took 6% each week to take full advantage of the company match. I could have taken more or less of a percentage from my paycheck but I had to keep in mind my bills and I was able to manage 6% without making things too hard on myself for the monthly responsibilities I have like paying my rent, my phone, my gas and electric bills, my student loans, my car care expenses and my grocery expenses.
I have not had a credit card for about 5 years now because I paid down all the debt I had irresponsibly racked up on my credit cards in the 15 years prior to that. I was uncomfortable with jumping right back in to owning a credit card once I was finally able to free myself from the debt I had accrued.
I do know however that I need to find a new credit card because it will help me to build my credit as I plan on using one responsibly this time. I know to avoid the many pitfalls that got me into credit trouble in the first place when I was younger. That is one of my major credit goals for 2016.
Another challenge that I face in 2016 is that my company actually sent me a letter two days ago saying that they were no longer going to do the company match on our retirement plans. It was very disappointing news and while I have had on again off again feelings about finding a new job outside of what I do now, this news hit me kind of hard two days ago when I first read it. I must make some tough decisions on whether or not I can afford to put a higher percentage of my check into my 401k/retirement plan now that the company will not be matching it.
I also need to come up with a more cohesive retirement plan because I know that I would like to be able to retire at 65 years old at the latest, and yet I have no concrete concept for how realistic that goal is with the money I have saved so far and my money management plans going forward. I am 40 years old now so I only have 25 years until I reach my hoped for retirement. 25 years sounds like a long time, but I know from the last 25 years that it goes quickly.
So I know that I am improving with my money management skills, but that I have a long way to go yet to realize both some of my short term and ultimately my long term goals. I think writing about it and sharing my experiences here has been helpful and revealing to me, and perhaps I can use this post as a self reminder for my future financial plans. Hopefully it might be of use to some of our readers too as you all deal with your plans for the future.