My Millionaire to-do list! Ya gotta start somewhere....

Budgets are sexy blogger J.Money started a My millionaire to-do list.

He directed us to check out his “millionaire to-do list”

1. Max out my 401(k)
2. Max out my Roth IRA.
3. Save/invest 1/2 of all future bonuses.
4. Sell unwanted stuff on eBay/Craigslist.
5. To be frugal, but not insanely frugal ;)

Then to create our own. As he says it doesn't have to be much just realistic so you can follow through with it.

I don't know about you, but I feel like his to-do list was pulled right out of my head. Of course we might not all have certain options open to us right now, but I don't think just because you find yourself in the position of not having access to certain things that it shouldn't be on your list.

Which brings me to his next direction which is to review your list every once in a while to remind yourself WHY your saving so much. One thing he didn't say, but that I think goes along with the reviewing of your list is to update your progress.


On the list that he wrote out he wrote next to each pledge that he wanted to do every year what doing that would mean and look like.

For example:

Maxing out his 401(k) would mean for him a total of $16,500 invested + $16,500 matched! 

He happens to be lucky enough to have a company that matches his contributions. Usually or at least from what I have come across most company's match up to a certain percentage most times it's around 4%.

So what does that mean for you, it means that depending on your budget there two different options that you have to get the most out of your money.

Your first option is if your company matches contributions and you can afford it max it out, by contributing $16,500 over the year, that is the amount the plan lets you sock away pretax every year. So I think to figure this out you would divide $16,500 into what you make over the year before taxes and change the answer from a decimal to a percentage which is what you should have taken out of your check for your 401(k).

Your second option is really two options for if your company matches a certain percentage.

If your company matches say 4%:

Option 2A: Arrange to have 4% of each check put into your 401(k).

It is really a no brainer or it should be that if your company matches up to a certain percentage that you should at least contribute that percentage to your 401(k) because other wise that is really money down the drain that you could have had in your 401(k). You want to take full advantage of what your company is willing to contribute.

I would recommend that you do the calculations to see how much you will save by contributing the same percentage as the company as your minimum. This is where the second part of your second option comes in.

Option2B: If after your calculations you find that by as a minimum contributing the same percentage the company does that your total contribution for the year totals less then the max aloud for the year ($16,500) change the percentage your contributing. Even if your company only matches 4% (yeah free money!) that doesn't mean you shouldn't contribute more then that percentage. This is only if you can afford to contribute more then the minimum percentage that is matched. If you can afford it figure out how much the difference of the 4% your already going to contribute grand total is from the max aloud contribution per year $16,500. Say it is $1,200 short of the max aloud, take that amount and the previous grand total you had and divide it from your total income over the year to get the new percentage you should contribute to max out your 401(k)

There you go which ever option you chose you just arranged to have your 401(k) maxed out.The money grows tax-deferred -- a terrific deal. And because your contributions are automatically withdrawn from your paycheck, 401(k) plans make saving easy.



Maxing out his Roth IRA would mean him having $5,000 invested –> stocks, funds

Note $5,000 is the max you can contribute to your Roth IRA every year which is with your after-tax money.

So when you make your list write next to each pledge what that would mean for you at the end of the year. This way you can add all your pledge $ up and use a tool such as the Millionaire Calculator  J.Money used from the CNN.Money website.

Then review it every once in a while to remind yourself WHY you’re saving so much.

My millionaire to-do list:

1. Max out my 401(k): I don't have one currently, because I am unemployed. But it's on my list for when I get one.
2. Max out my Roth IRA: I don't have one currently, because I am unemployed. But it's on my list for when I get one.
3. Save/invest 1/2 of all future bonuses: Not currently employed so no bonuses as of the moment, but again I am looking towards the future.
4. Sell unwanted stuff on eBay/Craigslist: I am currently doing this. I basically took an inventory of everything that I own and really looked at the items to determine if I really used them or if they were something I wasn't using anymore and thus clutter. I started doing this when our only vehicle died. I am unemployed and have no savings and although my partner is employed he doesn't have any savings either. My partner pretty much pays all the bills. I get some general assistance from the state: $200 a month. So with no savings and a need for a vehicle I became creative and started thinking of ways to get the money we needed for another used vehicle. Which is wear craigslist come into play. I took every item I wasn't using and put it up for sale. I have made about $65 so far, it's not much, but every penny counts.
5. To be frugal, but not insanely frugal.: I am currently doing this one. I am doing anything from finding ways to stretch the grocery budget to using coupons and buying things on sale, have a rebate, have ECBs or RRs.
6. Have $1,000 in an emergency fund.
7. Save 6 months of expenses.
8. Have a stockpile.
9. Own a home free and clear (no mortgage.)
10. Have no debt.

So these are some of MY financial goals and what I think I need. It may not get me to millionaire status, but as the title says ya gotta start somewhere.


Sarah


****disclaimer: I am not a financial planner and have no training, everything is in my opinion and based on what I know. Do your own research, consult a professional, and do what works for you.

Coupons don't make people poor, people make people poor

Frugal Dad recently had a guest post from Neal Frankle of Wealth Pilgrim, titled Your coupons are making you poor. He had some questions within the post he posed but also ended it with some questions, so I will go through the post and answer all the questions he posed from my opinion as well as make some comments on the topic as well.

When you spend time thumbing through the paper or surfing the net for great coupons…aren’t you really just thinking about spending money?

Of course you are.

I absolutely do not, I don’t spend my time going through coupons just to spend money but to save it. I go through the ads, the coupons, and all the blogs looking for ways to save me money and to stretch what little I have.

Coupons are directly tied to spending.

I agree, of course they come from the manufacturer of the product or the store carrying the product. The companies agenda is to get you to spend, and if you don’t think about it then you will spend. And people do get caught up in couponing and buy stuff not because they need it but because they have a coupon for it. However, if you are smart about it and patient, you will wait and find a sale for the product you have the coupon for and use the coupon then to get an even better deal. If you wait for Walgreens or Cvs to have the product on sale with register rewards (walgreens) or easy care bucks (cvs) you can do even better. If you look for rebates for those items, you do the best possibly making the deal a money maker as the rebate amount is before coupons and RR’s and ECB’s.

Have you ever heard of someone telling you that they bought something just because it was on sale?

This is another tricky thing to watch out for. You have to ask yourself is it really a sale, is it really a good deal, do we really need this, will we really use it?

Best way to find out if things are really good deals is to start your own price book. Use columns and write where you got it, the size, when you got it, and how much it was. Do this for your most shopped stores. Bring the price book with you when you shop and next time you see a sale you can look to see if it really is a deal or not.

If you find it difficult or think it’s too time consuming or daunting of a task you can subscribe to The Grocery Game, which is a coupon site that tracks sales by their 12 week cycles and lists in color coded sheets if something is at it’s rock bottom price to stockpile. It cost’s to subscribe, but most people have said that they save what they pay for the site and much more. If your not sure they do have a discounted trial period. I was subscribed to their site myself, but I didn’t spend enough to justify continuing my subscription. I saved as much as I spent on the subscription so they just canceled each other out, but I was only spending around $100 a month, most families spend that a week.

Coupons were created by the Retailers Association of America probably. They did it to give you a reason to get into their store and spend money. That’s it. They know that once you’re there, you’ll keep spending. You might get a deal on toilet paper, but they’ll get you on the breakfast cereal.

He has a point when he says that retailers want to get you by getting you in the door for the good deal just so that you continue to spend and buy other things not on sale. Best way to avoid this trap is to make a list of things that you need and stick to it.

Of course, some people use coupons to stop spending money they don’t have — and I hope that describes you. But most people get sucked in. Coupons get you to buy stuff you really don’t need.

He goes to say that our trash cans being full is proof that we are buying more then we need. I disagree, I think if the trash can is full it means we aren’t using what we have. Something bigger then people getting sucked into spending more money because they have a coupon or because they didn’t just buy what was on their list and mindlessly put things in their cart is that we are a wasteful nation. A lot of people make too much food for meals and then don’t eat the leftovers.

Not to mention that many people don’t recycle and reuse items. Or that they get into just buying a new item when the old one is broke. Many people would rather buy new then spend the time fixing what they have. I have 6 people in my house my family coupons and stockpiles items at rock bottom prices and we don’t even fill up 1 trash can. Why? Because we only make enough for us to eat, if we do have leftovers we don’t let them go to waste. We also recycle/reuse and fix broken items. Just because something is no longer of use one way doesn’t mean you can’t find another creative way to use it differently; you don’t have to use something how it was intended to be used.

When I need something I go out and get it. I don’t clip coupons and then find a reason to need something. Maybe I pay more for the stuff I need than you do. But I don’t buy anything I don’t really need. At the end of the day, I spend less money as a result of not collecting coupons.

For me it depends on the person, you have to be accountable to yourself and your family. You have to be financially responsible. Clipping coupons is the it thing, you see it all over magazines. It is a marketing ploy to get people to buy their magazine, that’s one reason they are talking about it and the other as he said to try and lure people into spending.

If your smart about it, you can take the amount of money you spend now make a list of everything you buy for your house and then find coupons just for those items, that alone will save you money. Yes you may find yourself buying additional things from time to time, but when combining deals with coupons you should continue to spend only what you started out spending. There are coupon queens/kings out there who actually spend less.

A Thrifty Mom shared a post from one of her very first readers; you can see the post in it’s entirety here. The reader Jeanette wrote about living within your means and how her family made certain decisions about their lifestyle. They hadn’t always made those decisions and she speaks about that as well that hindsight is 20/20, and how they wish they knew what they know now.

I can relate to that myself, as I am sure most people can. I have tried to pass my own wisdom of my own life experiences onto my family and friends, sometimes it is well received while most of the time I get humored. Can you remember anyone warning you about something and you did it anyway? We all get advice and learn about so many things yet in the end it’s our life experiences that teach us the most. I am a firm believer that sometimes we need to fail at things and get hurt to really learn those lessons. Life is like college courses, there are parts where you learn from reading and being told and then the parts you learn from doing and experiencing yourself. We hopefully learn from our mistakes or as I read somewhere there are no mistakes just learning experiences.

“We have made financially poor decisions over the years. We have used credit cards and then felt the burden of getting out from under them as the interest quickly accrues. We have longed for things we couldn’t afford. However, in the end, we have learned to work with what we have. And I am always looking for new ways to stretch our budget. Couponing is my newest find. I started only a couple of months ago, but it has become a challenge and game for me to see how much I can really buy with my money. I find that I am spending as much or less than I was before, but am getting 2-3 the amount of things for that same money."

Way to go Jeanette! It isn’t easy, using coupons can be confusing and in the beginning you might get caught up in spending, but I think most people learn from that and get to where Jeanette is, yes Neal she buys more then what she needs, but she is stockpiling when there are sales and she is spending less then what she initial was, you too can do it.

I myself subscribe to Refund Cents, Michele Easter has made books, videos, and interviews about her coupon experiences. She compiles deals for walgreens and cvs, but also mentions a lot of other deals out there. I go to the website but also get the newsletter and she always has success stories from familys showing how much they got and for how little, you really do get inspired by seeing what other can do with coupons. And you can’t beat the cost, even I who doesn’t spend a lot of money per month saves a lot of money, one trip to walgreens I saved around $75.

Of course I also have free blogs that I go to as well, here are the ones that I follow:

For financial matters I subscribe to Frugal Dad, he has great articles, but mostly I love all the links he has to tons of other great articles.

For couponing, frugal, thrift shopping:

A Thrifty Mom
Frugal Living Skills
Money Saving Mom
Passion for Savings
Saving with Shellie
Clipping Money
Frugal Living and Having Fun
Kansas City Mamas
My Frugal Lifestyle
Saving and Giving
Thrift Jinxy