Finding My Money

Cap had a great post about what we carry around with us all of the time.

I carry a money clip and a card holder.

Money Clip:
$11 cash
Drivers License
Bank of America Debit Card
Coffee card from the cafeteria (3 coffees purchased, 5 more and i get a free one)

Card holder
Chase Southwest Airlines Rapid Rewards Card - used for purchases to get free flights
United Healthcare ID Card
Providence Journal Press Pass Discount Card (never used)
Empty Starbucks Card
Starbucks Card with $2.63
Blockbuster Video Card
National Rental Card ID Card
Filene's Charge Card (used for discounts)
RFID card - to open locked door at work
Citi Platinum Select Card - Don't know why I carry it. I never use it.

There you are.

I don't think pensions are cool. This may be because 8.75% of my salary is taken from me to pay the pensions of people who have retired. That is not bad it itself, if I was planning on working for the state for the next 29 years. However, I am not. That means that when I leave state service, I will get all of that money back, with no interest. It was tax deferred, so I can roll in into and IRA and keep all of it, or I can take a cash distribution and lose 20% off the top to taxes. Either way, all of that money is sitting, without gaining interest. And unless I leave state service, I have no control over it.


I'm sure that this system was put in place as an incentive to work for the state. Until last year, the pension worked like this - work for 28 years, contribute 8.75% of your salary, after 28 years, retire, and collect 80% of the average salary of your last 3 years of service. Since I started with the state at 22, I could have retired with a full pension at 50 under the old system. Because the cost was getting out of hand, the system changed. Now, you need to work 33 years, and you cannot collect until you are 65. Trouble is, if you had been working for the state for 10 years when this change passed, you are grandfathered into the old system. So now, you have a bunch of new employees that want out, because they are getting screwed in comparison to the older employees, and a bunch of older employees that can't wait to retire at some point in the next 18 years.

Some system.

I wish I had control over my pension dollars. I wish I had a choice to contribute to the pension, or to the 403b. Problem is, too many people have no clue and would waste away their retirement savings the minute they saw the cash. Then, the same government that I work for would need to spend money to take care of them.

Well, the sooner I leave state service, the sooner I can roll it.

Well, I want to find my money. And we all know that Time is Money. So everyonce in a while I will add a post about Time Management or little lifehacks that can help you stay organized or save a little time in your busy day.

30 Boxes is a web-based calendar program that allows to enter events on the fly through a one-box form. You can share your calendar with buddies, keeping private events private.

Any easy way to see your calendar anytime you have a web connection.

Carnival of Debt Reduction over at Free Money Finance
Carnival of Personal Finance over at Financial Reference

More to come...

Everybody has a different way of keeping track of their money. Of course, there are pros and cons to each method, but what someone should choose is the method that works for them. Some people use a computer program like Quicken, some people balance their checkbook using the little paper registers.

However, keeping track of the money you have is only one piece to the puzzle of financial stability. What is more important, and often overlooked, is having a plan for how you are going to part with your money. Some people call these plans budgets, others call them spending plans. I call it my spreadsheet.

When I thought about creating my spreadsheet, I thought about how I go about spending money as it is. As it happened, I had some bills that I allocated to one paycheck, and other bills that I allocated to the other paycheck (we get paid bi-weekly). After I subtract those bills from our bi-weekly take home, there are the commonly occuring expenses that are not regular bills, like food, gas, dry-cleaning. Then there is the money that we take from the ATM for cash on hand and our miscellaneous expenditures. Notice that my miscellaneous category is expenditures not expenses. I consider these related words very different things. Expenses are things that you have to spend money on. Expenditures are things that you do spend money on because you want to, like books or clothes or movies.

I decided that the easiest way for me to see what I spend and then control how I spent, was to break it up by paycheck (every two weeks). So, I listed all of my regular bills, and assigned them to a paycheck, paycheck 1 or paycheck 2. I listed next to each bill the amount I would normally expect to pay. This is easy for something like my heating bill, which is budgeted, and therefore exactly the same every month. Same goes for my mortgage and my car loans. My electric bill changes every month, so I entered an average.

I was able to see how much of every paycheck goes to bills that I have to pay. Then I could see what was left. I talked to my wife who said she never spends more that $50 per week at the gorcery store. So I added that to each paycheck. Finally, I added 3 other line items to each paycheck: Eating out, Cash Withdrawals, and Miscellaneous.

Since I have really just started this, and going back in time to assign expenses to paychecks would be very time consuming, difficult and frustrating, I will be using the next 3 paychecks to gauge what i should be budgeting for those last three.

Once I get those budget numbers, it will be time to see how much I can save before I start to spend each paycheck.

Last night I caught a quick SNL skit based on a debt consolidation info-mercial. Hubby and wife are sitting at the kitchen table wondering about how they were going to get out from under those bills. Chris Parnell comes on screen with a solution - his new book "Don't Buy Thing You Cannot Afford." Husband and Wife try to get their heads around this new idea. It sounds crazy for these folks, to only buy something when you have the money to buy it. Check it out (with transcript).

It's a parody, but it's a sad reality. One that so many people fall into. I did. I was in college and I had a credit card with a $3,000 limit. You would be amazed at how little I have to show for that $3,000 now - four years later. What I do have is a large amount of my discretionary income going to paying off that $3,000, which has by now, I'm sure, more than doubled. So I've paid over $6,000 for nothing.

Not too funny now. But at least I realized it and made a concerted effort to make sure I paid no more than $6,000 for that nothing.

I'm just a man trying to find my money. Where is it going? Why is it going there? What can I do to keep it for me?

I hope that my blog can teach people, especially younger people, how to keep control of as much as your hard earned money as possible. I will be writing articles myself, as well as scouring the web and other blogs for information that I, and hopefully you, will find interesting.

Stay tuned and enjoy.