Should you continue to invest in your retirement plan?

The very short answer without question is yes. Don't take my word for it. Click on this link, here what Dave Ramsey has to say about it and then you can download a free report from Davis Advisors titled "The Wisdom of Great Investors. Insights from Some of History's Greatest Investment Minds.

It's a great read. Stuff you will not hear about on the evening news. So, take a deep breath, download the report and become wise as it relates to your retirement savings. Enjoy.

81, a number that's hard to believe

I'm so excited and humbled at the same time. At last night's Financial Peace class, we kept on cutting up credit cards. This is the third class in a row that multiple people have
cut up multiple cards. 15 cards from one person alone.

So, where does the number 81 come into play? That's the total number of credit cards cut up by this class of 60 people. Incredible.

So much life change has taken place in this FPU class, I could type out page after page in sharing their stories. The very short story is this group of people are getting it and making significant changes in their financial lives. In doing so, my hope is that they become open to what God wants for their lives.

See, once you put your financial problems behind you, your now free to experience the life God has in store for you and that makes life worth living.

I think I'm going to be sick...

You know one of my passions in life is bicycle riding. I've got a sweet deal with a friend of mine. I do his taxes and he maintains and fixes my bike. (Who's getting the better deal here?)

I've had his taxes done for some time and he's had my bike since before Christmas. No real hurry on my end because the winters in Ohio really stink for bike riding.

I asked Bill for an update on my bike and this is what he sent me. . . . I didn't know my bike had so many part. Bill emailed me to let me know it's now back together but he had some "extra parts". I think I'm going to be sick. . .

Emergency Fundy part 2

I received a couple of great comments from my resent "What constitutes use of your emergency fund?" I wanted to address both Christy & Reliantk008's comments in this post.

First to Christy's comment. She suggested setting aside "planned" savings for pet expenses. This would be a fantastic savings goal. Pet's are a loved part of the family and medical care for them can be expensive and unpredictable in their timing. Great suggestion Christy.

RelinatK008 asked how much of an emergency fund a single person should have? He also added a twist as he's a full-time college student. For a starting emergency fund $1,000 is great. $500 if your income is less than $20,000 a year. I'm guessing as a college student his income is less than $20k. A fully funded emergency fund should be no less than three months of living expenses. So, Reliantk008, if I were in your shoes today, I'd like to have between $500 - $1,000 until I graduate from college.

Thanks guys for the great comments and being the inspiration for this post.

What constitutes use of your emergency fund?

You do have an emergency fund don't you? (No a credit card is not an emergency fund.) Assuming you do have an emergency fund, what constitutes using this fund?

I've experienced some unplanned financial expenses here of late. Today, my son's car is in the shop getting a once over. Earlier this week, I took one of our two dogs to the vet and the cost was just over $350. (Ouch)

Are either of these two things emergencies?

The car repair. . . NO.

The vet. . . Yes.

Here's why. First, I save money on a regular basis for car repairs. Cars will breakdown from time to time or need routine maintenance. (I'm pulling funds out of my car repair savings for this.) My dog needing surgery was an unplanned and unforeseen large expense. (i.e. an emergency.)

So, I use my emergency fund for unplanned unforeseen large (over $100 for me) expenses. Once I use emergency fund dollars priority #1 for me is to replace those dollars ASAP to get the fund back to "normal".

A great tool to track your . . . . health

I'm always on the lookout for a cool tool that's easy to use and track data. Earlier this week, I came across prevention magazines website and saw something here that really caught my eye.

It's their "My Health Tracker". I like tools that help you track your money so I though to myself, this health tracker thing may be cool. I'll check it out.

After using it for only one week, I'm hooked. This thing tracks the following all for free!

1. What you eat and all the related calories, fat, protein, ect related to that food.
2. Your exercise and the calories burnt by exercising
3. Your weight loss or gain
4. Your mood
5. Your body size (I've lost 19 inches this year. Thanks Thin & Health / Super Fitness)
   

It also have over 20 reports you can run off of this data. Here's my calories burnt versus calories eaten this week. Based on me burning more than I've eaten I should have lost weight this week and I did. I lost 2lbs. (PS, I'm very close to my preseason cycling goal weight)

So, set some goals for yourself this week and find the tools to help you meet them.

What are you hoping for?

I just started reading Discover the Power in the Prayers of Paul. It's been a great read thus far. I just finished reading about HOPE.

Hope is defined in the dictionary as "desire accompanied by expectation of or belief in fulfillment". So, what do you have a desire to see fulfilled in your life? Before you answer, consider what roll you need God to play in this. . . .

Here's a list I came up with.

1. The hope of being used by God until the day I die. (Life doesn't get better than this.)
2. The hope of bringing family and friends to Christ
3. The hope of raising my two kids to honor and love God.
4. The hope of making a difference in my neighborhood
5. The hope of always honoring God with my life.
   

I made the top 20 list. . . Way cool

I'm happy and excited to be mentioned in the Christian Personal Finance blog, written by Bob Lotich let alone be considered one of his top 20 sites. Way Cool.

Looking at how Bob came up with his list, I'm quite honored to be one it. He writes some great stuff on personal finance from a Christian perspective. Please click on the link I provided above to see a listing and description of all 20 sites. It will be time well invested and who knows, it may even put some money in your pocket.

Keep checking out his blog because from time to time, He gives away stuff. I haven't won one of his giveaways yet but making his top 20 list is way cooler.

Thanks Bob and keep up the good work.

$8 a week

I can boil down the soon to be signed economic stimulus bill into two points.

1. You'll see about $8 more per week in your paycheck
2. It will take over 30 years to pay for this "stimulus"

If you ask me, borrowing money is what gets people / governments into financial trouble in the first place. I'm glad our government is trying something to help the economy. I'm not sure giving every working person $8 more dollars a week will do that.

Thoughts?

Bonds in my retirement account

But first, what exactly is a bond? Great question.

A Bond is just and IOU from the issuer to the Bond holder. In other words, I "loan" my retirement dollars to a company and they pay me interest until the bond matures at which time I get my loan back. (oversimplified explanation)

Most "experts" would say a good rule of thumb is to allocate the same percentage as your age to bonds. So, I'm 42 and based on that, I should have somewhere between 40-45% of my retirement funds in a bond mutual fund. (I'm currently below that allocation percentage.)

Fidelity has a fantastic page on their website that explains exactly how bonds work. (click here). It's well worth a quick read.

Here are three recommendations on bonds.

1. They should be part of your retirement plan allocation.
2. Always buy a bond mutual fund never individual bonds (the same applies to stocks)
3. I like a good global bond fund.
   

Jumping for Joy . . . 27 times

I'm very excited.

At this weeks Financial Peace class, we cut up 27 credit cards.



Life change is beginning for these families who cut up their credit cards. I'm so proud and humbled to be part of this. (Yea God!)

Income Tax Refund?

If you are like most, you'll be getting a tax refund this year. Mine is coming Feb 13th via direct deposit.

The real question here is what are you planning on doing with your refund? I've got some advise / opinion to share with you on this.

1. The most important thing you can do is write down on paper what you'll do once the refund hits your hands. If you don't write it down, you'll spend it 3 or 4 times over in your head. Heaven forbid you "spend it" before you even have it. 70-80% of people do this.
2. Put it back for an emergency. I know this is not the "fun" thing to do but, if you do not have a fully funded emergency fund, this is the smartest thing to do.
3. Pay down some debt. Knock out a bill or two. What a blessing to have less bills to pay.
4. Bless someone who's out of work. Take a portion of your refund dollars and give it to someone in need. Way cool!
5. If your consumer debt free, use your refund to "fund" your next family vacation. This one is our plan.

My final suggestion, especially if you have a large refund ($1,000 or more) fill out a new W-4 at work and pick MORE dependents than you have on your current W-4. By doing this, less will be taken our of each paycheck, giving you more money in your pocket now. Who wouldn't want more money now?

I paid cash for our newest car

Ok, technically, it is our family's "newest" car and yes I did pay cash for it. (The second car I've paid cash for by the way.) Being debt free is a wonderful thing.

The real story here is this car is a 2000 Toyota Camry with 186,000 miles on it. The car is for my soon to be 16 year old son. He is very, very excited as any 16 year old would be and Cindy and I are excited for him.

The real story here is I see this car as a blessing from God. The person who sold me the car called me and asked if I was looking for a car for my son. He just put tires on the car and it runs great but it was time for him to replace the car. Then he told me the price. I was almost embarrassed to buy it for so little. (But I did and I thanked God for blessing.)

See the blessing was not only the price of the car but the relationship I had with the seller and the cash I'd saved to "someday" help my son buy is first car.

How much was the car? Lets just say it will cost me more to insure it with liability coverage only in a year than what I paid for the car.

Sure Fire way to save some money

If you are like most people, saving money is hard. After all the bills are paid, there's not much if any money left to put into savings. May I suggest you're doing this money stuff backwards? See, savings should be the second thing you do with your money. (The first is giving back to God for what he's already given you.)

I've found the easiest way to save is to have an amount automatically withdrawn from my paycheck before I ever get it. If your employer offers direct deposit, they have the ability to direct your paycheck into more than one account. So you could have $x dollars from each pay go into a savings account and the balance go into your checking account.

If your employer does not direct deposit into multiple accounts, no worries, you can setup an recurring automatic transfer from your checking account to a savings account on your own. Set it up one time and it will occur automatically after that.

Try it for three pays or three months even if it's only $5 at a time. I'm betting you'll adjust with no problem and before you know it, you'll start to accumulate some savings and we can all use some of that in our lives.