With 2014 just around the corner I have already started preparing to make sure I have a prosperous year. 2013 had a lot of eye opening experiences for me financially. With that being said, I have decided to take one step back so I can take multiple steps forward. My lease will be up on my apartment at the end of February 2014 and I will not be renewing. Knowing all of your money is being pulled into a rental sucks; I have made the decision to move back in with my parents so I can save money faster. This is only a temporary solution for me to accomplish a few financial goals for 2014 so here is the list of things I will be accomplishing.
- Build my emergency fund back up to $3,000. Going into 2014 it currently has a little over $700. This emergency fund is in addition to my 401k and Roth IRA. My Roth IRA is not being funded they way I want it to be, but that is a goal for another time.
- Buy a car in straight cash without taking out a loan. I am talking about a used car of course. This has been a goal of mine for a long time and I have not put the amount of focus on it that I should have been. I’m shooting for around $6,000-$7,000.
- Start teaching the little one the value of money. I already have a savings account for him, but I will be taking him with me to the bank so he can take part in opening up HIS own savings account. When he was born he received one of those baby bottle banks and it is now full of change. I periodically allow him to put the change that I have accumulated in the bottom of my purse in his bank. Now it is time to start the process over. This money will eventually be invested once it reaches a certain amount so his money can grow.
- Last but not least, my big financial goal for 2014 is to save for a down payment on a home. There are many programs out there for first time home buyers so I plan on taking advantage of it. The monetary goal is $10,000.
Looking at the finally tally of how much I want to save this coming year is scary, but I am going to work hard on achieving it. “Whether you think you can or whether you think you can’t, you’re right.” Of course I am not going into this blind, I do have a plan and I am currently working on an idea to help bring in positive cash flow in addition to my salary. I will reveal it to you guys in time and keep you up to date on my progress in hitting these goals, so stay tuned.
I would love to know what your financial goals for 2014 are so please share.
Why is it every time I mention to someone that I do not have credit cards I get looked at like I have three heads or something. Is it really that uncommon for someone to live life without credit cards? I learned my lesson the hard way and vowed to never have another credit card again. My freshman year of college I signed up for my very first credit card just so I could get a free university blanket at a football game. My new American Express card quickly arrived in the mail with a $500 limit. I used the card a few times on small purchases, but always paid the balance off. By the time I reached my senior year of college they had raised my credit limit to $10,000. In addition to this card I obtained a Visa my junior year to accompany me on my study abroad trip to Italy for five weeks. They don’t take American Express everywhere so I needed a backup. To make a long story short I maxed out my Visa in Italy having fun and racked up my American Express by living off of it during my extra semester in college.
After the experience of trying to pay off the balances with my low paying job outside of college, I figured the best way to not allow this to happen again is to just live life without credit cards. It is so easy to live beyond your means when you have access to credit. You just figure you will pay for it later and end up paying more in the long run because of interest. I will admit my Visa ended up in collections and I paid my American Express off over time by being on a payment plan. In 2011 I settled my Visa and in 2012 I completely paid off my American Express. It was a great feeling to have no more credit card debt. Although I just recently paid off my credit card debt, I have been living without using a credit card since 2008, so again why do people find that so hard to believe.
Recently I had to go into my bank because I left my debit card at home; I needed to buy lunch that day in addition to depositing a check. The gentleman in the front was very nice and asked me a bunch of questions to verify I was who I said I was. Of course he has to do his job and up sale products so he started asking me about credit cards. I quickly explained to him I don’t use credit cards, which opened up a window for more questions. The main question he asked, “How do you pay for big purchases?” Duh…I save up for them and don’t try to live beyond my means. I didn’t say it like that, but that is how it sounded it my head. Next he asked me about what if I have an emergency and I told him I have an emergency fund for that with my credit union.
Living without a credit card is not as hard as you may think; it’s just hard getting started. The first thing you need to do is establish an emergency fund. I know it is hard if you do not have a lot of extra income so start small and just start building. Please do not confuse an emergency fund with your savings; they must remain separate. You will be better off this way. If you must choose which one to start funding first, it’s your emergency fund. Try to build at least one month’s worth of expenses in your emergency fund and keep building from there. I have depleted my emergency fund twice and now I am in the process of starting over. This account is in addition to my 401K and my son’s savings account.
The easiest way to get started is by creating a budget if you don’t already have one. Most people get into the habit of saving what they have leftover at the end of the month and this should not be the case. Treat your emergency fund as if it is another bill and pay yourself first, essentially that is what the money is for, unexpected bills. Trust me I know this is hard, but you have to make it a habit. Another option if your job has direct deposit and the capabilities to split your paycheck, set a certain percentage of your check to go into a separate account (your emergency fund) so you don’t even see it. Out of sight, out of mind right? I noticed when I did this little trick I was able to save faster.
Remember you have to begin somewhere so devise a plan and get started now.
“Saving comes too late when you get to the bottom.” Seneca