It occurred to me that while we have embarked on the adventure of saving every day, we have not set forth our goals. Tara's are slightly different but here are mine:
1) 6 months of expenses in a liquid account
1) 6 months of expenses in a liquid account
2) Debt free in 32 months
3) Happy investments growing at 14%+
4) A downpayment on a house (around 50%)
5) Work on a cash only basis.
6) Find meaningful ways to give
7) De-clutter all aspects of my life
8) Gain mastery in the few areas I choose to focus
9) Establish significant drip income from royalties
10) Live Happily Ever After
Over the course of the next few weeks I will outline how I intend to tackle each.
Last summer I suddenly became very ill. After weeks of various doctor consults to try and find the source of the problem, the one who did could not get me into the OR for another month. I had used up all of my PTO flying back and forth for my father's surgeries earlier in the year, and had to go on family leave, which ended up being a joke with the company I worked with at the time. Out of 5 weeks of full time and 2 weeks of part time work that I was out, they only paid 1 week of medical leave.
In addition, I was on narcotic pain killers for that whole time, which made my access to Amazon very dangerous. Housebound and uninhibited by my normal sense of self, I racked up a few thousand dollars on my Amex for things like the perfect recovery outfits and Groupon purchases for all the golf I was going to play once it was all over.
I had a couple thousand in my savings, but not the $5-10K I needed to get through those 2.5 months.
The first key to figuring out how much to put away in an effort to be prepared for the unexpected, is to figure out what are my monthly expenses. Crazy, I know. But I have no idea what I spend in a month or on what. When I'm most at peace about my finances, I am actively using Mint.com and the app for my iPhone. Mint gathers all of your spending from your bank accounts, credit cards, etc, and based on where you make your purchases will pre-categorize them, and then you have the ability to go back and edit those categories. They then populate charts and graphs so you can see what percentage of your spending goes to what.
I know what my big bills are, but I really don't pay attention to what I'm using my discretionary funds for. The management of my discretionary funds, and the cease and desist of credit use, are where I'm going to find opportunities to put away for a rainy day.
I realize that looking at everything can be scary. But it's only scary because it's the mess of the past!!! Your future is bright! So figure out just how bright it is going to be!!!
My objective is to put away at least $20,000 in my rainy day fund.
Let me first define what a "rainy day" means to me, a single lady on my own. 1) the inability to sustain employment or steady income through illness or family emergency 2) a natural disaster where you are put into survival mode 3) when you find yourself eating the canned soup with a questionable date from your food storage.
A rainy day is not the Coach Bag that I love and HAVE TO HAVE. It is not the vacation that would be so needed FOR MY HEALTH. And it most definitely is not for the new golf clubs that would make my game SO MUCH BETTER. --- I am guilty, by the way, of every single one of these breaches of the rainy day fund.
The rainy day fund needs to be somewhere that I can quickly get to it in an emergency. It should be in an account that earns some interest, doesn't have withdrawal restrictions, and can be gotten to same day. I will also state, that I believe in having cold hard cash stashed in the house for those truly life and death situations.
While searching the internet for institutions that offer these types of accounts can work, there are products that banks do not advertise. Have a conversation. Make your goals known. I don't know of a bank that isn't happy to hear that you are planning to stash and add to a significant chunk of cash in their bank for the long term.
The number I listed above will have to be revisited and revised every 6 months to make sure that it truly will cover not only my normal expenses, but be sufficient to cover any insurance deductibles, medical costs beyond insurance, and even interviewing/wardrobe expenses in the event it's loss of employment.
Through the upcoming weeks and months, I will share ways that I have found to put cash in my rainy day fund, but I want to hear what you have discovered! It helps to feel like we're all in this together, so please share your ideas in comments below!
TIP: Use Quickbooks or Mint.com or a similar program (even pencil and paper and that handy arithmetic) to itemize your monthly expenses. (and IGNORE the credit card offers on MINT!!!!!!). Identify areas that you can go without or reduce, reuse, and recycle. Start stashing away the amounts that you would have spent on these things in a liquid, interest bearing account.
Over the course of the next few weeks I will outline how I intend to tackle each.
Last summer I suddenly became very ill. After weeks of various doctor consults to try and find the source of the problem, the one who did could not get me into the OR for another month. I had used up all of my PTO flying back and forth for my father's surgeries earlier in the year, and had to go on family leave, which ended up being a joke with the company I worked with at the time. Out of 5 weeks of full time and 2 weeks of part time work that I was out, they only paid 1 week of medical leave.
In addition, I was on narcotic pain killers for that whole time, which made my access to Amazon very dangerous. Housebound and uninhibited by my normal sense of self, I racked up a few thousand dollars on my Amex for things like the perfect recovery outfits and Groupon purchases for all the golf I was going to play once it was all over.
I had a couple thousand in my savings, but not the $5-10K I needed to get through those 2.5 months.
The first key to figuring out how much to put away in an effort to be prepared for the unexpected, is to figure out what are my monthly expenses. Crazy, I know. But I have no idea what I spend in a month or on what. When I'm most at peace about my finances, I am actively using Mint.com and the app for my iPhone. Mint gathers all of your spending from your bank accounts, credit cards, etc, and based on where you make your purchases will pre-categorize them, and then you have the ability to go back and edit those categories. They then populate charts and graphs so you can see what percentage of your spending goes to what.
I know what my big bills are, but I really don't pay attention to what I'm using my discretionary funds for. The management of my discretionary funds, and the cease and desist of credit use, are where I'm going to find opportunities to put away for a rainy day.
I realize that looking at everything can be scary. But it's only scary because it's the mess of the past!!! Your future is bright! So figure out just how bright it is going to be!!!
My objective is to put away at least $20,000 in my rainy day fund.
Let me first define what a "rainy day" means to me, a single lady on my own. 1) the inability to sustain employment or steady income through illness or family emergency 2) a natural disaster where you are put into survival mode 3) when you find yourself eating the canned soup with a questionable date from your food storage.
A rainy day is not the Coach Bag that I love and HAVE TO HAVE. It is not the vacation that would be so needed FOR MY HEALTH. And it most definitely is not for the new golf clubs that would make my game SO MUCH BETTER. --- I am guilty, by the way, of every single one of these breaches of the rainy day fund.
The rainy day fund needs to be somewhere that I can quickly get to it in an emergency. It should be in an account that earns some interest, doesn't have withdrawal restrictions, and can be gotten to same day. I will also state, that I believe in having cold hard cash stashed in the house for those truly life and death situations.
While searching the internet for institutions that offer these types of accounts can work, there are products that banks do not advertise. Have a conversation. Make your goals known. I don't know of a bank that isn't happy to hear that you are planning to stash and add to a significant chunk of cash in their bank for the long term.
The number I listed above will have to be revisited and revised every 6 months to make sure that it truly will cover not only my normal expenses, but be sufficient to cover any insurance deductibles, medical costs beyond insurance, and even interviewing/wardrobe expenses in the event it's loss of employment.
Through the upcoming weeks and months, I will share ways that I have found to put cash in my rainy day fund, but I want to hear what you have discovered! It helps to feel like we're all in this together, so please share your ideas in comments below!
TIP: Use Quickbooks or Mint.com or a similar program (even pencil and paper and that handy arithmetic) to itemize your monthly expenses. (and IGNORE the credit card offers on MINT!!!!!!). Identify areas that you can go without or reduce, reuse, and recycle. Start stashing away the amounts that you would have spent on these things in a liquid, interest bearing account.
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