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January Goals Update

Oh January.  1/12 of the new year has already passed, but I feel like I’m already making significant progress on changing my life, and I couldn’t be happier! Here’s how the month shaped up:

  1. Read 6 books
    Check!  I’m rather pleased with this result after last month’s failures.
    A Crimson Warning on 12/31
    Stumbling on Happiness on 1/2
    Murder in the Marais on 1/5
    Murder in Belleville on 1/15
    Pictures at an Exhibition on 1/18
    Heat Rises on 1/22
    America’s Hidden History on 1/28
  2. Pay off one of my credit cards
    Check!!!!  Soooo happy I was able to knock out my Bank of America card, first on my financial priorities list, when I sent the last payment on 1/24. :)
  3. Throw out 20 things
    Check! I got rid of 20 different things as of 1/31
  4. Keep a gratitude journal for the month (to get started on my 2012 goals)
    Check! Somehow I managed to write down my gratitude every day for 30 days.  Change is coming :)
  5. Put money into my Roth IRA
    Check! $200 in the retirement account this month. Not a lot but certainly better than nothing. Now that I don’t have a 401(k) that gets put in automatically, I think I’ll need to step this up.
How has your new year started?  Did you make any progress on some major goals for the year?

 

Buying More Stuff Will NOT Save the Economy

(image via myluxmagazine)

This special, extra post of the week is brought on by one simple little sentence at the end of an article at the Consumerist. The author ends with, “So cheer up and go buy some stuff to do your part!”

Seriously, I’m sick of being told to “buy more Stuff” and spend more money to “save the economy!” Buying more Stuff will NOT save the economy. How do you think we got in this mess in the first place?  Spending more than we earn.  Debt to income ratios of 133%.  Gobs and gobs of credit card debt.

A quick Google search pulls up a multitude of articles addressing the topic. One in particular stuck out to me from one of my favorite business people AND owner of the Dallas Mavericks, Mark Cuban himself.  In his post “An Idea for the Economy that Will Freak Out a lot of People but could be Fun to Discuss,” he states (emphasis mine):

The Republican/ Tea-Party approach to job creation is to cut taxes. The theory being that more money in the pocket of individuals will cause people to spend more money in the economy thereby creating more jobs. Nope. Not happening. Why ? Because individuals have too much debt. Any money they get goes to pay credit cards, student loans and for the smart and fortunate into savings.

For me, this simple paragraph hit the nail on the head. “Because individuals have too much debt” and any extra money right now will go to pay that off.  My extra money at the end of the month?  Straight to debt repayment.  My meager tax refund?  Straight to retirement savings.  Any and everything that I have left at the end of the month is spent getting my debt down and my net worth up.

Speaking as someone who has debt FROM spending on things I can’t even remember, the last thing I want to do is derail my current debt repayment plan by “helping the economy.”  My life is changing as I purge the Stuff and build up my wealth.  I feel relief as I clean out my closet.  I felt extreme joy as I paid off my second to last credit card.  Every step I make to stop accumulating Stuff and paying off the debt that came with it, is one step closer to financial freedom for me.

I find it interesting that the two most stable economies in the world right now (Germany and Sweden), also have the two highest savings rates (see this article at learnvest for more detail). The article states that spending actually is necessary, “But if it’s spending fueled only by credit, it’s good only in the short term and very bad in the long term, ultimately undermining economic stability.

My advice to people would be save your money first and buy when you have enough money in the bank to afford that purchase WITHOUT credit. Stop this cycle of “ME, ME, ME” and wait for something. The freedom from being able to purchase something outright feels so much better than buying on a whim and not even remembering how you got so much credit card debt and what you might have possibly spent it on.

I want the economy to improve just as much as the next person, but I’m afraid it would take an entirely different mindset as a society than we’re ready to accept for it to be truly healthy.  In the meantime, I wish everyone would stop telling me to “spend more money” and start preaching a healthier relationship with money.

 

February Goals

(image via Wikimedia Commons)

We haven’t even made it through January yet and I’m already chomping at the bit to get February’s goals on the books!! Once I post the results of my month, I think you’ll understand why I’m so excited, but here we go for February goals:

  1. Read 4 books (must stay on track for 52 in 52!)
  2. Finish funding my Moving Fund (most likely will need it next month)
  3. Begin full inventory of items (in order to aid my minimalization efforts)
  4. Continue writing in my gratitude journal (see why in my 2012 goals)
  5. Practice French 15 minutes a day
  6. Complete 10 days of absolutely no spending! (As seen on my 30 before 30 list… more about this later)

I almost feel like I’m adding a *little* too much to my plate this month, but want to give it a shot now that I have all this newfound free time (bye bye coffee shop!)

How are you continuing your 2012 goals?

 

Retirement Savings: Where Do You Stand?

A couple days ago I read a post that I LOVE by Robert over at The College Investor, “You Are Probably Your Biggest Asset.” This stat he highlighted really jumped out at me:

I recently read a study from AARP that highlighted the following:

  • By Age 30, you should have 40% of 1 year’s income saved
  • By Age 40, you should have 2 year’s income saved
  • By Age 50, you should have 4 year’s income saved
  • By Age 60, you should have 9 year’s income saved

I truly love that stat because it helps give a benchmark for where I should be in saving for retirement. I constantly worry that I’m not saving enough or not making enough of an effort. I don’t want to give up life now for life later, but I can’t help but stress out over it.

At a couple months shy of 26, I have about 60% of my current yearly income saved in a combination of Roth IRA, Rollover IRA and 401(k), all of which have aggressive allocations right now.  I hope that percentage rises to be at least 100% of a year’s salary by the time I’m 30, if not higher.

What are your thoughts on the numbers the AARP gives? Do you feel that you’re doing pretty well or falling behind?

 

Things that Inspire: January Edition

It’s been quite awhile since I’ve done a roundup… but I’ve run across so many things recently that I love, inspired me and made me think:

    • Coldplay featuring Rihanna – Princess of China
    • Leo at Zen Habits posts on Your Top 10 Clutter Questions, Answered
    • Erich Maria Remarque on his novel All Quiet on the Western Front, “This book is to be neither an accusation nor a confession, and least of all an adventure, for death is not an adventure to those who stand face to face with it. It will try simply to tell of a generation of men who, even though they may have escaped shells, were destroyed by the war.
    • Mindmeister.  It’s been great for helping me map out ideas!
    • Over at Pick the Brain, Nick Walden writes about Setting Your Mind for a Winter Weight Loss and George P.H. has 5 No-BS Ways to Become Awesome in 5 Minutes
    • Google put up an awesome graphic and explanation of the SOPA and PIPA acts with the slogan “End Piracy, Not Liberty.”  Yet another example of how Google is awesome.
    • SaveUp makes it easy to see how much debt you’re paying off and how much money you’re saving, all while giving you a chance to play for some cool prizes!  I haven’t won anything yet, but I’m hoping I will get something someday. :)

Maybe I’ll make these things more regular, or maybe not.  You’ll just have to wait and see!