Wednesday, August 31, 2005


Ah, yes, the most important part of any plan: GOALS.

I have several goals for my money. I still need to set up a time frame for each of them, get specifics for numbers, and lay out how to obtain them.

But for now, the big ones are (in somewhat chronological order):

1. Additional wedding expenses
2. Honeymoon
3. Emergency fund
4. Roth IRA
5. Down payment on a home


All of the "Get Rich Slow and Steady" books and websites recommend paying yourself first if you intend on saving up large sums of money. Pay your savings account every month like you would a bill. Right now I'm struggling with whether I can follow the 60-20-10-10 method of income allocation and put a large chunk of my take-home pay into savings (roughly a quarter). The method is as such:

60% of take-home pay goes to necessary expenses
20% goes to retirement and other long-term savings
10% goes to short-term savings (emergency fund, etc.)
10% to "fun".

In the long-term savings category, I am currently saving 4% pre-tax in my 403(b) (max of employer match), so after tax I'd like to be saving 16%. Currently, I'm saving roughly 10% total (in my ING Direct Orange Savings account at 3.3% -- email me if you'd like a referral for a free $25).

I've worked out this "dream scenario" with my major budget categories in Excel, and it seems like it could work, with very little room for error. My regular budget, however, doesn't include categories for clothing, health care, gifts, etc., just one big one for "other", which is whatever is left over after all the other expenses are paid. So after taking out the cell phone, Netflix, and cable & internet from the "fun" category, I have $91 left, and this will have to be that "other" category from now on. Jeez. This will be tough.

So my plan for tomorrow:
Pay off credit card
Move an additional $120 to savings account
Start tracking all expenses to follow budget