Fabulous Financials

I was paid this week and expect another on or before the 1st.  Therefore, I can postpone my rent until next pay day and consider this entire paycheck free game.  How ’bout that!  But what in the world would I do with it all?  Hmm…let’s see.

• I could buy more Christmas gifts.
• I could spend another birthday weekend at the Ritz.
• I could stash some cash and go nuts at the end of my shopping strike.
• I could plan a last minute holiday vacation.

Yes, I could do all of those things, but you know me better than that.  Right?  Right!  When I’m on a mission, my focus is more keen than a military sniper.  So instead of wasting an entire paycheck, I decided to give my e-fund some love:

Goal: $25,000

Previous Balance: $22,695

Recent Deposits: +$1,900

• Monthly Interest: $0
• Direct Deposit: $100
• Manual Deposit: $1,800

New Balance: $24,595

Additional Savings Needed: $405

Only $405 more to go.  Woo-wee!

The rest of my paycheck went towards end of month bills.  With online billpay and online transfer, the entire thing was gone in less than 10 minutes. LOL!  But I also have a freelance invoice for a few hundred dollars pending payment on the 21st.  The timing is perfect because I plan to use it during the holiday break.  BabyGirl and I will have 9 days of no work, no agenda, no ‘things to do’ list, and no concrete plans.  Which means, an idle mind is the devil’s playground I will need some “play money” and the $405 e-fund shortfall will have to wait until next year.  *shrug* Works for me.

Happy Friday!

Here’s a quick update from last month’s e-Fund report:

Goal: $25,000

Previous Balance: $21,432

Recent Deposits: +$1,262.85

• Monthly Interest: $39.21
• Direct Deposit: $200.00
• Manual Deposit: $1,023.64

New Balance: $22,695

Additional Savings Needed: $2,305

Now that I’ve decided to reduce my 401k contributions, I can probably squeeze out another $2,000 before the end of this year.  With one more paycheck in the month, all bills accounted for, and a few more holiday expenses (especially if I decide to travel again), it may only be $1,800.  If so, the remaining $500 will have to wait until January…unless I earn something extra on the side.

You know something?  Making deposits into my e-fund gives me a rush.  It really makes me excited.  I think it’s because I remember a time when I couldn’t afford to save.  I worked to pay bills.  That’s it.  Most of the time, my expenses were more than my income and I had to rob Peter to pay Paul.  Whenever I’d get ahead, something happened to make me take two steps back.  Because of that, I couldn’t grasp the idea of “pay yourself first.”  For years, I lived this way.  From the looks of those around me, it was normal.

In order to break the cycle, I had to focus on increasing my income - not debt reduction OR savings.  With a higher income, it became easier to pay my bills.  Once I was able to pay all of my bills without skipping a beat, then I began to save - a little.  Although I had extra money to save, I was always so used to being broke, it became a self fulfilling prophecy.  So I shopped.  Then I went through a phase of compulsive shopping and binge saving with one bad habit competing with the other.  That internal battle lasted about a year.

It wasn’t until I decided to buy a house that I changed my habits and began to save consistently.  After a few months, I was saving only what I could afford, I stopped dipping into my savings to shop, yet I still allowed myself to shop occassionally.  Several bad habits were corrected when my mind focused on accomplishing a goal.  Once I realized the connection, I allowed my goals to drive my behavior with money.  Now, when I have a goal in mind - like increasing my e-fund to $25k - I think to myself “is this purchase really that important to me or can this money be used to feed my e-fund just a little bit more?”

And then I get excited all over again!

photo credit: wonderwebby

The fourth step to maintain Fabulous Financials is to invest for the long term.

This can mean many things, but I prefer to focus on the following:

Invest IN Self

Before your finances can be fabulous, YOU must be fabulous.  This requires a bit of work because it involves self awareness, confidence, and continuous improvement.  Do not blame others for your problems, own up to your ish and fix it.  How?  Through education, applying what you learn, choosing friends who are positive influences, and avoiding complacency - keep learning, keep advancing, and keep improving.

Invest FOR Self

After investing IN yourself, considering investing FOR yourself.  Many of us plan to work 30+ years, and if we’re lucky, we’ll live 20+ years after that joyous day arrives.  Then what?  Life must continue, but the steady paycheck will be gone.  The only way to ensure fabulous financials through retirement is to plan NOW.  During your years of abundance, always invest at least 10% of your current earnings for your future self.  Although the market is volatile, a diversified investment plan with a long term focus should help you weather the storm.

Invest in the Future

Invest in your children’s future by passing on the value of an education.  Encourage your children to be the best that they can be.  Set an example by being a living example.  If possible, begin saving for their college education to alleviate some of the financial strain.  All of the above will give them a leg up and have substantial long term benefits.

What are you doing to improve your finances in the long term?

Goal: $25,000

Previous Balance: $20,589

Recent Deposits: +$842.89

• Monthly Interest: $42.89
• Auto Deposit: $100.00
• Manual Deposit: $700.00

New Balance: $21,432

Additional Savings Needed: $3,568

I spent quite a bit of time organizing my finances this weekend.  I reconciled my personal and business accounts, paid all credit card balances in full, scheduled all bill payments through the end of November, and set reminders for any December bills received.  Afterwards, I noticed the checking account balance had room to move a little extra to my e-fund ($700) and set a spending budget for Thanksgiving related expenses ($500).  Barring no other emergencies, I have just enough left to cover monthly necessities and a little weekend entertainment.

[image credit]

The third step to maintain Fabulous Financials is to save for emergencies.

Many of you already know how important an emergency fund is to me.  In my opinion, you don’t have fabulous financials just because you own a home, drive a luxury vehicle, play with the latest gadgets, and wear designer clothes.  That’s only an “appearance” of the fabulous life.  9x out of 10, those people are only one paycheck away from the soup kitchen.  The only thing worse than being poor is being middle class one day, then a disaster hits, and you’re dirt poor the very next day.  At least poor people know they’re poor and learn how to manage within their limited means.

When life is abundant, that is when you should be planning for the worst.  Just because you have $200 left after all of your bills are paid, doesn’t mean you should spend the entire $200.  Of course you CAN, if you want, but you shouldn’t.  Why not?  Because shit happens!  So if you’ve mastered step #1 (increase income) and step #2 (reduce expenses), consider putting a little change aside to plan for the day when things may not be all cookies and creme.

Plan for the day your HVAC system stops working in the dead heat of summer.  Plan for the day your car breaks down in the middle of rush hour.  Plan for the day there’s a family emergency and you need to hop on a plane immediately.  You never know what life may throw your way.  When you truly have fabulous financials, your bank account (and standard of living) will overcome a minor emergency and survive the storm in stride.

If you had an emergency TODAY that required $1,000, would it put you in a bind?

Please share tips on how YOU save for emergencies?