Comments on: Deciding 2008 Goals http://www.mapgirl.net/mfc/2007/12/19/deciding-2008-goals/ Just tidbits about money and finance. Sat, 22 Nov 2008 00:18:20 +0000 http://wordpress.org/?v=2.5 By: Kimberly http://www.mapgirl.net/mfc/2007/12/19/deciding-2008-goals/#comment-188557 Kimberly Wed, 19 Dec 2007 22:17:11 +0000 http://www.mapgirl.net/mfc/2007/12/19/deciding-2008-goals/#comment-188557 I think you've realized that saving is easy. They take the money out of your paycheck every month, you never see it, and at the end of the year you have big balances in your account. I think that's why you tend to want to go that route, because it's easy, and saving for retirement is a good thing. Paying off debt and controlling your spending are much harder. These are your shortcomings, your greatest "fiscal challenge". I think that 2008 should be the year you tackle these things. Take a page from your new friend Single Ma's book. Be debt-free and fabulous! I think you’ve realized that saving is easy. They take the money out of your paycheck every month, you never see it, and at the end of the year you have big balances in your account. I think that’s why you tend to want to go that route, because it’s easy, and saving for retirement is a good thing.

Paying off debt and controlling your spending are much harder. These are your shortcomings, your greatest “fiscal challenge”. I think that 2008 should be the year you tackle these things.

Take a page from your new friend Single Ma’s book. Be debt-free and fabulous!

]]> By: Single Ma http://www.mapgirl.net/mfc/2007/12/19/deciding-2008-goals/#comment-188549 Single Ma Wed, 19 Dec 2007 17:48:32 +0000 http://www.mapgirl.net/mfc/2007/12/19/deciding-2008-goals/#comment-188549 I'd choose Plan B simply because I'd want to be rid of that CC debt - pronto. I’d choose Plan B simply because I’d want to be rid of that CC debt - pronto.

]]> By: Brian A http://www.mapgirl.net/mfc/2007/12/19/deciding-2008-goals/#comment-188544 Brian A Wed, 19 Dec 2007 16:24:47 +0000 http://www.mapgirl.net/mfc/2007/12/19/deciding-2008-goals/#comment-188544 Well, I suppose if you wanted to take an analytical approach to this you would estimate what you think the market will return over the next few years versus how much interest you are paying on your debt. However, I don't think you should follow this approach. I hate to get all Suze Orman-ish on you but debt is more than numbers, it carries some serious emotional baggage that I'm sure you're aware of. Removing debt allows you so much more freedom in your life. Think of how many decisions you make based on how much debt you have. Now remove that debt and you'll have one giant less thing to worry about or consider. Priceless. Reducing debt is like a George Forman grill but instead of knocking the fat out of a greasy hamburger, it knocks the fat out of your financial decision making allowing you more freedom to enjoy your life. So contribute enough to get your company match but focus the rest on your debt and building up that emergency fund (i.e. your Plan B). I wouldn't try to front-load your 401(k) at the beginning of the year since I think having a consistent, automatic budget every month is important plus I don't see the benefit unless you know the market will be lower in the first half of the year than the second half. p.s. I hate budgeting too and tried to get on the Quicken or MS Money train many times but failed. Now I just keep two Excel spreadsheets. One that itemizes all of my recurring monthly expenses (rent, utilities etc.) so I know how much "free" money I have to play with and the other that tracks all of my accounts (retirement, brokerage etc.) each month so I have a running tally of my net worth. This works for me but I only analyze my big purchases. I've gotten into a financial rhythm where I don't overspend on the small things so I can safely ignore them. Good luck. Well, I suppose if you wanted to take an analytical approach to this you would estimate what you think the market will return over the next few years versus how much interest you are paying on your debt. However, I don’t think you should follow this approach.

I hate to get all Suze Orman-ish on you but debt is more than numbers, it carries some serious emotional baggage that I’m sure you’re aware of. Removing debt allows you so much more freedom in your life. Think of how many decisions you make based on how much debt you have. Now remove that debt and you’ll have one giant less thing to worry about or consider. Priceless. Reducing debt is like a George Forman grill but instead of knocking the fat out of a greasy hamburger, it knocks the fat out of your financial decision making allowing you more freedom to enjoy your life.

So contribute enough to get your company match but focus the rest on your debt and building up that emergency fund (i.e. your Plan B). I wouldn’t try to front-load your 401(k) at the beginning of the year since I think having a consistent, automatic budget every month is important plus I don’t see the benefit unless you know the market will be lower in the first half of the year than the second half.

p.s. I hate budgeting too and tried to get on the Quicken or MS Money train many times but failed. Now I just keep two Excel spreadsheets. One that itemizes all of my recurring monthly expenses (rent, utilities etc.) so I know how much “free” money I have to play with and the other that tracks all of my accounts (retirement, brokerage etc.) each month so I have a running tally of my net worth. This works for me but I only analyze my big purchases. I’ve gotten into a financial rhythm where I don’t overspend on the small things so I can safely ignore them.

Good luck.

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