ADOBO LIFE

FINANCE TIP: SAVE BIG BY STARTING SMALL

We have heard of the concept  - save money and pay yourself first! But does this really works? 

Some women DO pay themselves first!  The most common method that I know --is not in the form of investment  BUT through tangible things that will make the fashion police proud! - Yep - -new shoes or bags monthly!

NO DUH!  If they have not realized yet that they  will not be forever the skinny 30 hot babe, then years down the road...I am sure we'll see them all hanging out together - mapping the floors at  some grocery store at 60!

I share my passion for saving money with you through this  blog as I am so scared of being that old and gray lady! The steps are not hard - -just commit to  small baby steps! Start saving with twenty - fifty - hundred dollars monthly... and slowly build your wealth one dollar at a time!Save Money!

The beauty of compounding ...10-20 years from now - it's going to be worth something! Today, this is not about tips on how I try to  minimize cost but how I redefine the definition of fund management that worked to my advantage! Here's how to save money:

STEP 1: START OUT WITH A PLAN: Before you can save money, you need to know how much can you afford to save!  Using one month as a point of reference:

a. Start with the basics of accounting all bills, debts and expenses you need to settle on a monthly basis: 

• List all MAJOR expenses that are constant (utilities, mortgage, phone,gas etc)

• List all MINOR expenses by sub category - (a)Food - grocery, lunch etc (b) Entertainment - movies, popcorn, dining out etc (c) Shopping - clothes, shoes, accessories

b. Place value on each category and start  crossing out  items you can let go for a month. If you can, try to delay major purchases for the next 12 months
c. Do a simple forecast of how much money you want to save by end of  3 months, 6 months, 12 months, 3 years and 5 years
d. Place a MONTHLY savings goal  on how much you need to set aside to achieve forecast
e. Set up a cash on hand budget that you have access  for Week 1
f. Plan bank visit for Week1 (once a week to get the cash on hand budget)

STEP 2: SEPARATE ACCOUNTS: If you are directing your salary to an account with a debit card you have access to ... Hmmm....-then you will have a problem! We need to have at least 2-3 accounts to ensure that funds are monitored and balanced on a monthly basis (direct deposit, checking and  savings). Consider my strategy:

a. Send salary to a direct deposit account like ING DIRECT (highest interest so far)

• For the MAJOR expense category: Set up an automatic transfer for a fix amount

• For the MINOR expense category: Set up  XX% of salary to a savings account ( with NO debit card access . Realistically, you have no time to go everyday to the bank...so you will be forced to manage what is available

b. Keep XX % of money at the direct deposit account for the MONTHLY saving goal

STEP 3: EVALUATE WEEKLY PROGRESS: This is very critical as this will make or break your goal.

•  On a daily basis, list down all expenses in your diary so you can track if you are below or above your budget.
• At the end of the week, count all money in your wallet including coins. If you have left over cash - -place them in an envelope and set aside.
• Go to the bank and get the cash on hand budget for week 2
• Follow same process for Week 3 and Week 4

STEP 4: ASSESS  MONTHLY GOALS: For the next three months, make sure that you commit yourself to this saving money project. Plan a support system to do this like -- writing a diary/ blog, reading articles on ways to save money and researching on investment opportunities. Reward yourself by placing all the leftover money in the envelope back to the bank! Think of it like money you loaned to a friend and they will never pay you back! This is now your virtual asset!  Stay out of the mall and stick to the plan!

STEP 5: PLAN FOR BIGGER THINGS:   By the end of  six months - -start planning like the Trump! Increase your saving allocation with the intention that you will purchase a bigger investment next year! If you are fortunate to be working for a company that provides percentage matching to 401k contribution and employee discounts on stocks purchase.. start reading about it!

I know some people who will delay contributing as they cannot let go of  small extravagances(i.e. shopping, eating out etc). But teach your left brain to tell your right brain that this is free money! So walk towards your HR department and ask for the details so you can escalate your savings strategy to a different level. 

I will stop here as I will let you ponder and make those baby steps happen! Again...save money...save money...save money!

FINANCE TIP: READ FINE PRINTS TO SAVE MONEY

Who would expect that a movie will  inspire me to write about how to save money.

Saturday night is a family movie night and we usually pick some sort of action blow in the head movie genre (a.ka. Die Hard type, if you know what I mean). But tonight we picked - THE RAINMAKER (because my teen recognized Matt Damon from Bourne series) so like other famous Grisham titles, as expected, the plot is centered on a lawyer's case - -( and interestingly - -a  Memphis connection. Hmm, did he also used Memphis in THE FIRM ?)

This movie is about  insurance claims and I am glad we chose this as it gave me a personal  realization  on the value of reading fine prints in our mails to help save money.

Where do we start?

Ask yourself if you are one of those lucky recipients of  4 to 5 mails from your friend USPS guy everyday? If yes, do we need to start paying attention to the details as not all mails may be considered as junk mails? If so, Here's a short list on where we can  start:

HEALTH INSURANCE:  If you are getting your insurance through your employer, typically at the start of the year,  the health insurance company (i.e. CIGNA) will send out confirmation summary of your benefits (in addition to slips you get from your company). Make sure you read the coverage and ensure that it matches to what you have signed for (coverage, monthly payments,  out of coverage, out of network and copay). They also send quarterly mailers out on notification and a standard account summary when you visit  your doctor/dentist. Make sure you file the mailers as sometimes, they combine announcements and it will go unnoticed. If you have not received anything by now, check with your human resource department for required information update or if changes are necessary.

CREDIT CARD STATEMENTS: Not only should you check the details on your monthly account activity but also the percentages rate set to your account. I do not keep a credit card balance so this should not be a problem for me, but if you are in a situation that you are paying off multiple cards, be certain that your bank is diligent in notifying you on any changes to percentage rates . When you apply the rule of accumulation, a point change marks a big difference. Call  your bank card and ask for updated rates mailed to your email account, and while you are at it..consider asking for the manager and try to negotiate for a smaller interest rate.

CHECKING ACCOUNT: We always assume that we have enough cash to cover our bills, but it's worth checking how much do they actually charge for potential overdraft. Your bank  may send a mailer to announce potential changes, but this may go unnoticed in your mail and/or those smallest print invented. It's always worth checking every 6 months to make sure you are updated with your rates or any unauthorized activity.  I remember one time when my bank charged me $35 for an overdraft on a $120 check  when I have sufficient amount to cover 2  months worth of mortgage - - sometimes there are system errors, so make sure you check  your statements (weekly, if possible).

USE OF ATM: This is what I hate most. Why will they charge me for $1 or $2 when my bank is in network? Read the fine print of where your bank has networks and only withdraw money at locations where you don't get charged service fees.

BENEFIT PROGRAM (Airlines, hotel, mileage etc): They get tricky nowadays. Wake up and read the news - -airlines have been merging, hotels have been buying each other out, multiple companies are up for acquisition- -- so don't throw out those mailers where they make those little formality announcements to their corporate activity. Recently, Delta and Northwest have merged and I threw out a mailer where they were recommending to move over my Northwest miles to Delta  or they will forfeit it. Good thing, Dr. D hubby reminded me otherwise my 70,000++ NW miles will be under the drain right under my nose.

CAR INSURANCE: Another mailer I hate but  worth reading. Car insurance companies are getting more aggressive to get your business, so make an effort to be updated on the offer and place them in your tracker as the information may be handy at the time of renewal.

STOCK BROKER: If you are into investing, they send quarterly updates on your portfolio. But recently,  they may be desperate for more investors as they are offering freebies for new forms of investments (i.e. roll over, trading etc). Take advantage of this offer!  

STORE COUPONS: JC Penney , Dillard's and Macy's regularly send us coupons  during our birthday month. Be sure to read the expiration date on the gift coupon to maximize the free offering to your advantage.

CREDIT CARD/BANK OFFERS: Discover Card /American Express/ Gas Cards love sending us mails? They are so desperate to get our business that they are throwing freebies left and right!  I am a bad target as I don't like to carry additional card so  I kept trashing out the  offer. But do check out those mailers and corresponding offer dates as they may help you save money specially when you are considering consolidating your accounts.

OTHERS: Magazine subscriptions, online store offers, club memberships etc.  -- Maybe I should start reading them out before I throw them out - - who knows..

BOTTOM LINE: There's nothing to lose by investing 3-5 minutes to go through your mail everyday. There's more at risk if you let an opportunity passed by.

10 REASONS TO BUY WAL-MART STOCKS

ALWAYS BUY LOW! Just like my new habit of clipping coupons - - who doesn't like a good deal? The same is true with stocks!

I am keeping a close eye on Wal-Mart stocks! Please pretty please...go down. I am a newbie in stocks and my goal is to diversify my  portfolio. I start watching Wal-Mart in March ($51 then) and with my small stash (Where to splurge extra money), I am just so desperate for the day that it will hit $47 again.  Today it's $48 ! Go lower!

I don't have any formal education on stock investing, I am just winging it based on gut feel and observing the real life situation. But here are my reasons why investing in Wal-Mart stocks may be a good buy for me:

1. INCREASING CUSTOMER BASE:
With the increasing clamor on how to save money, more and more people are finding ways to extend their dollar's worth.  Wal-Mart parking lot at 7am is already packed!

2. STRONG FINANCIAL STATEMENT:
Increasing revenue with a sturdy gross profit and net income performance

3. HIGH PROPENSITY TO EXPAND INTERNATIONALLY
Wal-Mart's International segment consisted of retail operations in 14 countries and Puerto Rico. How many countries are there? Definitely, I can see Wal-Mart penetrating the European and Asian market in the next 5 years.

What's their position in the global market at this time? Reading at an article at reuters.com -The International segment consists of its wholly owned subsidiaries operating in Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom, its majority-owned subsidiaries operating in five countries in Central America, and in Chile and Mexico, the Company’s joint ventures in India and China and its other controlled subsidiaries in China.

4. COST CONTAINMENT:
If you have not noticed  the latest Great Value logo boxes, look again.

The simplified logo on  the shelves (at least in my eyes) may indicate that the company is finding ways to reduce spent on marketing /branding cost and may even indicate that they are aggressively negotiating with suppliers on keeping prices low.

This works to my advantage as this means keeping products lower. I tried clipping coupons on some product but I ended up purchasing the Great Value brand due to price difference.(See: HOW TO SAVE MONEY: CUT ON GROCERY BUDGET)

5. DIVERSIFIED SERVICES:
The financial services and products, including money orders, wire transfers, check cashing and bill payment are increasing awareness. These new services add revenue to the company. You have to notice the lines in the kiosks ...I usually see 3-5 people in the line.

6. ONGOING EXPANSION:
When other companies are closing down, Wal-mart is continuously expanding and making their presence known. See this article on  Walmart Whitby expansion

7. LABOR SUPPORT :
See article,  Retail jobs are good jobs  on how they plan to expand health care plans to US employees and steps to put an end to legal issues associated to settling class action suit. For me, this strongly suggests that the company's initiative to do the right thing and take care of their employees is a good strategy to keep up with changing demand versus competitor and ensure long term existence.

8. IN-STORE HEALTH CARE OPPORTUNITIES:
By now, we are aware of their retail pharmacy that offers lower copay for generic brands at retail set up. I found this article on a new business venture where they are planning to set up in-store clinics in some branches - Wal-Mart opening clinics . This only means increasing traffic on potential customers  to conveniently shop at the store after their clinic visit  (in addition to revenue generated for this new service)

9. INCREASING INVENTORY AND AGGRESSIVE PRODUCT DIVERSIFICATION:
In May, Wal-Mart Stores, Inc. announced that it plans to add more new products and features to its consumer electronics area across its 3,500 stores.

10. HOME DELIVERY/ ONLINE ORDER ON  MEDICATION:
I am NOT thrilled about this one as this will compete with my company,  but this is a new revenue generating program for Wal-Mart that may be successful if they do it right. See  $90 days supply for $10

See REUTERS  for additional details on company

SHARE YOUR INVESTMENT IDEAS?

FINANCE TIP : STAY FOCUSED ON YOUR INVESTMENT GOAL

A colleague of mine saw this blog the other day and he is not convinced that I am the type who is focused on savings ( umm..is he trying to be funny or what?) I reinforced to him that it's not really about counting my daily pennies..but rather -- my quest for long term savings by making my investment portfolio stronger today!

The thing is: After my investing madness, I only have  a couple of hundreds left in my pocket ...so in order for me to enjoy what's left -- I am clipping coupons, finding deals online etc etc. Whew! Yes..my friend..if I can stretch my left over money - - I will!

For sometime now the stock market is down...so I am happy to note that in the last few months, slowly the value of my small investment is crawling up again ( when I say small..it's really small ok?). 

HOW DO I STAY FOCUSED ON MY INVESTMENT GOAL? Not sure if I have the right answer - - but my strategy is simply to:

• AVOID DEBT:  I refuse to pay interest on credit card!

• DELAY HIGH VOLUME PURCHASES: I drive an old car that is fully paid for and I don't care if a customer service rep in our company drives a Hummer and makes me look smaller than my 5'4 95 lbs.

• PAY MYSELF FIRST: This is the most important factor. I am into the habit of allocating  a fix percentage of my income for stocks and emergency fund, maximize 401K investment allowed per year and any extra money goes to my Roth IRA....hence why I have a couple of dollars left every month after deducting the bills, mortgage etc

• TRACK PROGRESS REGULARLY: Since I have no cash in my wallet, I placed my attention of counting the virtual money performance on a monthly basis. This  motivates me (in my dreams) that sometime 20 years from now...these stocks will hit a jackpot and I will be a millionaire! See FINANCE TRACKER FORM
  

• LEARN WHAT REAL MILLIONAIRES DO: If you want to read more about value of investing today, you can read the following:

Why You Need a Roth IRA
Article by Erin Burt, (Kiplinger, 3/9/06, updated 2008)

Pay taxes now, spend more later
(Article by Bill Donoghue (MarketWatch, 12/11/07)

Roth IRAs Save Dessert for Last
Article by Martha M. Hamilton (Washington Post, 12/31/06)

• SHOW LOVE TO KRAMER: I don't care about what other networks say, but I am inspired with Jim Kramer's passion on stocks! Makes me want to invest more

ANY THOUGHTS? SHARE YOUR IDEAS BY PUBLISHING YOUR LINKS:

FINANCE TIP: LIVING GREEN HELPS REDUCE COST

The buzz word nowadays is "Living Green". www.livinggreen.org  defined it as "making choices in our day-to-day lives that are healthy for people and the environment. These practices can help save  money and at the same time  improve our health and overall quality of life".

When you think of it --it's really going back to basics! Remember the days when our parents remind us to shut down the lights when not in use? It's no different from the way we lived then - -only today - it's the government and active groups who are telling us to do so!

This morning, I took a course on our company's Living Green policy -- and it inspired me to start a smaller scale policy in our house.

The girls don't  know it yet (no different anyway from my daily yacking)...but tomorrow I will reinforce it during dinner!

To keep me inspired, I joined ONE MILLION ACTS OF GREEN and in addition to my support to the site, here's  my list of how to live green to reduce household cost this summer:

Lower your energy consumption

• Turn off lights , TVs and computers when not in use
• Close air conditioner in the morning
• Unplug electronics not being used
• Open windows
• Plan on watching DVD rented as a family unit
• Do laundry in cold water
• Set air conditioner at 79
• Close closet doors at all time
  

Minimize use of paper/plastic/disposable items

• Wash and reuse ceramic plates/ silver utensils for parties
• Minimize use of disposable snack bags
• Carry lunch in a reusable container
• Use personalized water bottles instead of disposable
• Use rechargeable batteries
• Reuse empty  boxes for any storage needs

Reduce kitchen related activities

• Plan meals for the week
• Reduce visit to grocery
• Cook all meals on a weekend
• Use microwave to heat sauces instead of stove top
• Minimize baking
• Include no-cook meals in menu (salad, sandwiches, chips and salsa)

Others

• Separate biodegradable versus  non biodegradable items in trash
• Donate items to charity

FINANCE TIP: MAXIMIZE WEEKEND TIME

Does saving time equates to saving money!

For busy working moms,  juggling non stop meetings and conferences during the day and rushing back home for another non stop mommy duties can be exhausting! You think, you're done for Monday - -only to repeat it for Tuesday, Wednesday ...la la la! I have lots of friends who can multitask ...but at some point  --we all need some breathing space to just take things slow and enjoy a relaxing weekend with a good bottle of wine! (Forget the chores!)

How often have we heard the saying ... Time is Gold!

With so many activities around the girls  (driving lesson, awards ceremony, birthday parties etc), I barely have time to spare for my earthly whims!

At some point..I made a call - - enough is enough.. I will move my weekend chores to weekdays (even my blog time) so I have more quality time to enjoy the things I love most (reading, going to the gym, shopping with kids, hanging out with Dr. D hubby).

How can I  make my life stress free? For me, it's so simple - - I just took a dramatic cut on TV time and reallocated them to minor chores! As a result, for the last three weeks, my weekend was not spent mopping floors and driving to the grocery! Instead, I finished two books and created additional weekend time for some family fun activities we have missed in the last 2-3 months(i.e.gun range, bowling, movies - -bring it on!). Now, I don't have an excuse! Don't tell the girls! Yikes!

FINANCE TIP: FIVE WAYS TO AVOID DEBT

I was fascinated on the latest craze on earning opportunities online (ads for home credit processors, mystery shoppers, affiliate online researchers etc)  that I wonder if taking a second job is worth considering to expedite my wanna-be millionaire dream? Let's see 8 hours full time work, 1 hour wanna-be chef time, 1 hour dinner, 1 hour blog time, 1 hour reading, 8 hours sleep - - If that means, not being able to watch Hell's Kitchen or House - - hmmm..maybe not!

The goal is for me to save and enjoy life and not to be a saved in the ER trying to reach a wanna-be dream!

Earlier at yahoo finance, an analyst made a positive assumption that  the market will be stronger as investors are placing money back in the game. With creditors  releasing money, this may mean higher interest rates on cards or other loans in the next few months.Speculations or not, do I want more possessions so I will be tied up with high interest rate in the next 3 years? Don't think so!

 I have been successful in my zero card balance policy and so far these five rules worked.

Minimize credit card usage: 

Articles indicated that an average American has 5 credit cards and has approximately $5,000 - $20,000 debt. I hope I will never be included in that census. This is the reason why I maintain only three active cards (one for grocery with a small limit; one for personal use that I have in my wallet for back up and one for emergency that I keep in my files). By maintaining few cards, I am able to limit frequency of consumption/usage to a few merchant. This is effective specially if you want to avoid the temptation of larger chain stores at the mall. I don't have a balance in my card - -and I intend to keep it that way!

Making  a priority list vs play money :

If I can list down all the food I need to purchase on a weekly basis so why not execute the same technique for my personal purchases beyond $50. I created a file and listed down my wish list by category to determine if I can afford it and at the timing I want it to happen based on my play money (extras after savings/bills/investment).

To do this, I simply created columns and listed down my wish list by category and ranked them in order of need (or shall i say, want?).

I  always research for best online price and read the Sunday  ads for specials and add price comparison in the table. Since I wear a 0P (zero petite), I make sure that I go to the store and actually try on a dress so I can be confident if I need to make online purchases. Finally, if I have to make the actual purchase online, I ask Dr D hubby to pay it via his pay pal account and I just cut him a check. In this way, it will be  automatically be drafted from my play money fund . You'll be surprise that each time you go to the mall, the craving for retail therapy will be reduced.

                          My excel column categories:

• Segment: Clothing, Car, House Items, Makeup etc
• Brand: Clinique, BCBG Dress etc
• Purchase by: Cash, Visa Card
• Merchant: Online, Dillards, Macy's
  
• Occasion: Birthday, Christmas
• Estimate Cost: $250
• Play money for the month: $200 (Remaining money after bills, savings and other loans)
• Rank: High, Low, Medium
• Month: July, Aug

Go Cash if possible:

The convenience of credit/ debit cards is tempting. Swipe and go, swipe and go..you are always confident that there is a magic  helper trapped in your wallet  until the bill arrives. To avoid being trapped in the credit cycle, I make sure that I maintain $20 in my wallet. In this way, personal ad hoc purchases (like snacks, laundry, video rental) are controlled. I used to have a debit card when we were in Colorado but not anymore! The debit card gave me the arrogance that I have money on hand when I am in the store that I usually spend more than I can afford!

Never rush  on major purchases:

Who doesn’t like a new Volkswagen Beetle? I am due for a new car, and yes, I can afford it, I have been dreaming about it, my eyes turns green with envy whenever I see one at I-40 …but I am taking my sweet time as I refuse to pay for car loans. There came a time when I have to draw the line of what are basic necessities and what are luxuries in my life. Taking the car as an example: If my current car can still move me to and from work, if it can help me transport my groceries to and from home - -this is all I need for now.

Don't keep up with the Joneses:

Does your neighbors have swimming pools,  drive BMWs,  weekly parties ! Good for them…all the things I want to enjoy, I can DEFINITELY  afford,…but I REFUSE to pay. The thinking process should be simple…Find ways to maximize your time in cutting cost and saving more money so you have no time to spare to create physical inventory of what you have and what you don’t have  versus the guy next door. I forced myself to accept the concept of virtual assets earned through long term investing. In my head, I may not be driving a new Volkswagen but I look forward to having  one green and one yellow Volkswagen and if I get lucky a Porsche ...maybe  15-20 years from now. Wow, I'll be a hot grandma!

Weekly clean closets:

Cleaning closet, cleaning garage…we’ve all heard of how once found treasures just by clearing up boxes. I have tried this and it worked for me (See my blog:CLEANING CLUTTER CAN HELP CUT COST ). So far, I have saved  trips to the store when I arranged my personal items in boxes. Since I cleared up some space recenlty, I am starting in a clean slate and am more conscious of  items I have accumulated that may still be of value. 

NEXT: PRIORITIZE SAVING VS SPENDING: You do not have to give up on occasional splurges..just learn how to find ways to have fun and still save!

FINANCE TIP: FIVE STEPS TO BUILD AN EMERGENCY FUND

There are variations on definitions of emergency fund. Some articles would recommend 20% of a person’s yearly salary; others will enforce 6 -8 months worth of fund that will cover you for any rainy day; and some will even highlight a specific amount like $20,000 in addition to your savings account. Do we really need this? Probably not,  if you have gazillions in your savings account. Big YES! If you are worrying that one day your job will be declared as redundant or just hates the thought of   waking  up  empty handed when you need money the most.

For emergency fund neophyte like me, I find this to be a challenge as I have a fix allocation for savings, retirement, personal loan and investments on a monthly basis that when I review my left overs for play money (this girl still needs make up and shoes!), I literally have less than $200 to spare each month. So, last month,  I came up with the big idea of my emergency fund..here's how

Start with a realistic goal in mind:

While I value the concept of emergency fund (as a separate entity to savings),the goal  of starting with at least $10,000 dollars for emergency is ridiculous for me as  I don’t think I can afford it. Since I want to make this work, I stepped back and set a lower target that is manageable. After all bills and investment, this is the goal I set for 2009. By January 2010, I will revisit if this is working for me or not

• Set initial amount: $1,500
• Set Time Frame: May - December 2009 (7 months)
• Amount per pay check: $107

Learn the art of discipline and pay yourself first:

The concept here is to have access to cash. While online banking is convenient, for this start up amount I created a dummy piggy bank where I have placed my first $107 in cash. The rule is to discipline myself to feed the pig before I go out and play. By August, I will set up an online allocation.

Always count your pennies:

I have been tracking my expenses since January. If you have not done so, there are lots of online tracker you can use (MSN Money,www.mint.com, www.budgetpulse.com etc). Apply what works for you. For now, I still prefer my excel spreadsheets where I can sort by segment. This allows me to review which areas I have overspent at which merchant without logging online

                           MY EXCEL COLUMNS  INCLUDE:

• Account: Cash / Credit
• Merchant: Name of Store
• Amount: Exact details
• Segment: Personal, Video, House, Food, Clothing, Gift etc
• Allocation: Kids/ Me/Family/Hubby and Me
• Notes: Personal grumbling about how I want the item badly
  

Cut on “feel good” expenses:

I used to pay myself for petty indulgences like a Grande Mocha every Friday, eye brow wax, movie every weekend and so much more. While the expenses may initially appear affordable to me ($40 -$70 a pop), when you place the value in excel, the total amount is horrifying. To combat this, we created family activities that are both entertaining and engaging. Not everyday is a good day….If I am bored or feeling depressed, we just head out to the gym for the adrenalin rush to bring me up again.

Engage support from friends/family:

As you enter into the "Expense Cut" mode, try to engage a friend/husband/daughter/sister to support your personal cause. This means agreeing on lessening trips to the mall, minimizing lunch sessions and scheduling activities that does not involve invasion to growing cash pile. The good thing about peer support is the value of keeping you focus on your goal, overcoming challenges, building confidence that you are doing the right thing for a cause.

For what its worth, creative a positive outlook that this as a new fun hobby and not a burden. 

NEXT : AVOID CREDIT CARD DEBT: Do not join the growing bandwagon of people that are unable to pay credit card debts. Eliminate card debt if you can.

FINANCE TIP: TRACKING FINANCES HELPS YOU KEEP FOCUSED

Its that time of the month again that I have to review if my attempt for frugal living and investing habit is working for me. NO ..NOT a millionaire yet...but tracking everything makes me feel I am going somewhere!

I have reviewed my investments for the last 6 months and I am pleased to see a slight recovery on the stocks. They are still down, but the delta on the gap performance is relatively promising

As a summary:

o       Purchased Stocks: Less than $200 deficit versus purchased price

o       401K.a: Personal Rate of Return from Jan 09 to 04/17/2009 is -2.3%

o       401K.b: Quarter return deficit at (11.85%) or Year deficit of (41.73%)

o       Roth IRA: Investment deficit of (82.47%) versus acquired stock value

If there's one positive thing that help me with this blog - -It's the habit of being focused on the bigger picture and looking beyond current situation to achieve long term goal! Not a millionaire here as I am still counting dimes and pennies...but maybe one day...

FINANCE TIP: WHERE TO SPLURGE EXTRA MONEY

I can think of so many things….new pair of shoes, leather watch, and down payment to a new BMW (I wish!) But we opted to invest additional $$$ in Roth IRA.  Yes, the check was mailed yesterday. Bye Bye baby for the virtual money that we don't enjoy today.

For today, I would like to share with you articles I enjoy related to Roth IRA. Hopefully you'll understand why this is important to me. Because we are young and still have years before the 59.5 year mark, it just make sense for me to invest in the stock market where I know I will have the highest rate of return when that time comes that  I have to cash it out. I haven’t decided yet on the portfolio but I am strongly leaning towards to investing at Walmart (NYSE:WMT) since I go there every weekend. But, we’ll see

Why You Need a Roth IRA

Article by Erin Burt, (Kiplinger, 3/9/06, updated 2008)

Quotes:
One of the smartest money moves a young person can make is to invest in a Roth IRA.

When you're just getting started investing, the Roth should be your first stop -- even before you open a regular, taxable account, or contribute to a workplace retirement-savings plan. The only exception is if your employer offers a match on your 401(k) contributions.

Pay taxes now, spend more later

(Article by Bill Donoghue (MarketWatch, 12/11/07)

Quotes:
You will never retire on the money you save for retirement; you will retire on the money you make on the money you save for retirement.

To make money on your retirement investments, get as much as you can into a Roth IRA as soon as you can. All of your profits will be free from income taxes after you hold them in your Roth IRA at least five years.

Roth IRAs Save Dessert for Last

Article by Martha M. Hamilton (Washington Post, 12/31/06)

Quote:
"I think people of all ages should be thinking about Roth IRAs, especially those who are young," Fahlund said. Otherwise, if you put pretax money into a savings plan at age 20 and leave it in until age 70 1/2 when you are required to begin withdrawals, "you have been growing taxes for Uncle Sam" for 50 years.

Why the Roth Rules

Article by Robert Brokamp (The Motley Fool, 4/16/03)

Quote:
If you're confused about which type of retirement account to choose, here's the quick and easy (and probably smartest) strategy: Put your money in a Roth IRA.

I started investing  in Roth IRA in 2004. The market is down right now, so its worth nothing...but 20 years from now...I'm sure it will be something!

FINANCE TIP: TRACKING EXPENSES IS A MUST

To help me focus on my (wanna be) millionaire goal, I track my expenses and investments on a monthly basis. And like big companies that report  financial earnings for the quarter, I have summarized my excel columns  so I can interpret my personal investment analysis for the quarter.

Today is a good day for the stock enthusiasts as the DOW ended positively at 497.48 points (finance.yahoo.com). Even if my favorite stocks is up at 2.06 points, this is not applicable for me as my long term investments are still  declining at a dramatic speed. Like most investors, my total portfolio is depressing! Good thing I am not retiring tomorrow, otherwise I am doomed.

Q109 INVESTMENT BREAKDOWN

Q109 PERFORMANCE:  Don't let the percentage share mislead you, the only reason why the cash value increased substantially is that the value of stocks went down. However, overall my accumulated wealth increased by 17% in March versus January despite the decline in stock value. That's why, I can't wait for 10 years as I know the value will be back to its normal state (or even more)   For now, I attribute further growth in wealth accumulation on the combined changes I made at the start of the year:

• Additional 1% to current 401K contribution
• Pay self first at $300/month under cash savings
• Maintain 10% purchase on stocks
• Zero balance on credit cards
• Zero books purchased for the quarter (I usually spend $ 25-35 /month)
• Zero Starbucks purchased for the quarter (usually 1 Grande mocha every Friday as a treat)
• Online purchasing for clothes
• Brown Bag for lunch
  

Practice what you preach! Plan, Invest and Live Frugally! I also enhanced those rules in my own way, like eliminating Starbucks in my vocabulary, reduce visits to the mall etc etc  but at this point I am at a dead end on how I can save even more as I have exhausted all avenues.

I am not joking when I highlighted in my earlier blog that after all allocation taken out for savings, investment and personal loans (I still have approx 50% more to go on the money hubby spent for immigration processing - $12,000 total), I am left with approx $200 ++ as my play money.

So today, I took an inventory of all receipts and credit card statements and placed each item in an excel chart so I can determine what additional expenses I can cut back.

Q109 PLAY MONEY BREAKDOWN

Thanks to the magic of excel, I figured out details of what happened to my play money during Q109.(Detail of stories are featured in my blog archives)

• NY TRIP 21%: This trip is necessary in January as we have to personally appear in the embassy - So it’s a static expense in the tracker

• DINING OUT: 4% - This is manageable as March is a busy month full of celebrations (2 dinners for G3’s birthday and 1 celebratory dinner with hubby for a good evaluation at work)

• PERSONAL: 4% - I purchased new sets of contact lens in March as my eye grade changed. I need to plan ahead for the girls' contact lenses before school starts in Sept. Also, I restocked on my vitamins in March ($130)
  

• FOOD: 3%: We use a grocery card to track our food budget. However, one time, I left the card so I charged $145 at Sam's Club to my personal card - -All good, i don't want to cut on essential food! Although, I need to evaluate if I should cut back on our steak dinners every Friday (or maybe not)

• HOME: 2%: We changed G2 and G3 room décor in March. So this is considered as one time expense.

• CLOTHING 2%: There was a big sale at Gordmans/Kohl’s in Feb and I can’t resist the sale hoodies for the girls. Also,  I purchased two work shoes in March at Dillard’s to replace my best buddy shoe (lasted for 2 years) and updated work shirts ($120) in Feb
  

• GIFT 1%: Valentine’s Day! I love this day!

• GAS 1%: Increased in consumption as the twins are driving every weekend

• MOVIES 1%: I cannot cut back anymore as I moved from Blockbuster to Redbox already

• LAUNDRY: This is the lowest it can get as we are using G2’s services at $1/ shirt

• WINE: No change necessary

Is tracking expenses good for me? YES..and I encourage this habit for savers like me.  Initially it's a tedious process as I had the habit of losing my receipts but now its part of my routine. I even have a special organizer to help me manage day to day expenses.

For Q209 , I need to be vigilant of my  cash-based expenses. Sometimes those little trips to the grocery where I spend $10 here and $5 there needs to be accounted for. This includes lottery tickets I purchase at $4/week

In the grand scheme of things, compared to where I was six month ago,I know Iam heading at the right direction towards my goal  I think I pretty much instilled the saving rhythm in my system.

Today I showed this blog to a  good friend of mine - Ms D- -and she said..I should change my title from  "Adobolife - My 101 ways to be a millionaire! I know I will never get there, but no one can stop me from trying to be one" to  "I may get there one day" . . . . Again,no secret formula , just three simple steps that I follow to get ahead

Planning, Investing and Living Frugally!

(I wish I have started 10 years ago!)

HOW TO SAVE WHEN YOU HAVE NOTHING LEFT TO SAVE?

If I am retiring today, clearly, my money is gone!

What can I do today so even if the market remains unchanged in twenty years, I can still sleep soundly?

I reviewed my Roth IRA account today (I never look at it as I have no access to this until I am old and gray at 59.5 y/o anyway) and I was disappointed to discover  that the stocks invested four years ago has little value today. I did not even attempt to look at my 401 K as I know I will be equally dismayed. So, what else can I do today so I can increase my nest egg?

I am adherent to my financial plan (i.e. 16% contribution to 401k / 10% purchase on stocks/ no balance on credit card)  but one thing that  I need to add to my already  frugal world is to pay additional $300 / month to a separate account consistently like I would pay the mortgage.

Sounds good, but what expenses should I cut back so I can allocate additional $300 to savings?

BUDGET CUT PLAN PER MONTH: TOTAL: $301

• SAVE $35 on MOVIES by substituting with $1/movie rental at Redbox/ New Release video box
• SAVE $ 80 on WEEKEND MEALS by cooking dinner steak specials every Friday
• SAVE $ 16 on STARBUCKS by eliminating Starbucks in my vocabulary. I have already reduced 3 cups/wk to 1 cup/wk in previous goal
• SAVE $100 on SHOPPING by avoiding Wolf chase Mall.
• SAVE $ 40 on CLEANERS by ironing my work shirts on weekends
• SAVE $ 30 on BOOKS by purchasing books online. I will miss Barnes and Nobles!

If I am successful, this will yield to additional $3,600/year OR $18,000 in 5 years OR $36,000 in 10 years. Tomorrow, I will open a separate savings account so I can start paying that account for the next 12 months and will let you know if I am successful or not

To my lovely daughters, who loves reading my blog - -Don't worry, we are not cutting back a cent on your monthly allowance, the trips to the Chinese /Japanese buffet and gazillion perks you all enjoy! ....Relax! .....Breathe!

FINANCE TIP: KEEP ON DREAMING EVEN WITHOUT CASH

I wish I have the guts to say that I will be a millionaire in 10 years!

REALITY CHECK: I won't and I don't have a secret sauce to do it anyway ! So I have accepted the fact that ...

a. It doesn't hurt to strive to be one
b. It's certainly not a crime to dream like one
c. It's no secret that wishing for the stars is free...so why not take advantage as nothing in life is free nowadays

Let the truth be known that all my efforts are geared towards one encompassing goal nowadays..Save, Save and Seriously ...Save. (Let's qualify - - i said nowadays or 25% applicable 5 years ago okay?)  Yeah, I must have read one of those articles that said...: "Its not how much you earn, but how much you save that counts crap" .

THE BARE FACT: Everybody is saving (or attempted to) somehow, some way and in some form. But how can I outsmart myself, break from traditional norms so I can exponentially see my money grow faster than the common Joe.

THE CHALLENGE: I was privileged to be introduced to the concept of 401 k and Roth IRA by my hubby (Dr. D to simplify typing in my next blog). At first, I hated the rationale of someone taking out 15-20% off my pay check. For someone who was naïve at investing, it freaked me out that I have no access to ready cash when I want to. I felt depressed with the idea that after the gazillion taxes deducted, mortgage payment, living expense allocated , I was left with barely a few dollars to purchase some personal possessions.(you know...Clinique, Lancome, Laura Mercier). I can't even afford to watch the latest chick flick in theaters nowadays. For two years, I was kicking myself whenever I hear the word 401k until I started seeing the money accumulating and in my little brain ..I realized, that If I  learn how to accept  and memorize the phrase "sacrifice those little indulgence" or "one shoe equals one share of stock" , there is a big chance that I can be a millionaire one day.

THE LEARNING CURVE: So I started reading about the value of compounding, investment rates, purchasing investment stocks , became more cognizant to the fine points in my investment accountsand got hooked up with yahoo finance to satisfy the hunger of learning more about how to make my money grow.

YTD Feb 2009

THE RESULT: As I learned and understood the market peaks and opportunities, I had this urgency to invest even more. I don't even care if the market is down today as I am optimistic that it will go up again in 3 years. And let's face it - -whatever I invest now, is like purchasing items in clearance or 30% sale at current price. Technically, I am a headless chicken in a shopping spree! Shopping for virtual assets, that  I can't even feel or touch. In my mind, I purchased  the value of a virtual promise that one day it will be mine.  To illustrate: Let's pretend that I have $100 dollars today, you will see that my cash on hand is only 3% of 100 or $3. No crazy shopping money for Macy's, Dillards for now. But once I hit 60 years old, my combined 401and Roth allows me to spend 68% or $68 dollars (plus interest). PLUS: some play money from my stack of stocks. I wish I am 60 now to enjoy this. But, who am I kidding. I have NO CASH to burn today.

I am sure you know more than I do on investments but at almost 4 years of investing in this virtual financial world. For me, I am grateful that my current company is generous in granting added perks (401 k matching, stock purchase plan etc) so even if I have coins and dimes left for my worldly splurges I am confident to say that even If I won't be a millionaire in ten years ...I feel I am worth a million dollars now as I have advanced my perspective beyond what is expected of me today.

MY QUESTION: Why do I feel rich even if I have no cash today? Its so simple!  My dream is real and the distance from where I have started and my  end goal to be a millionaire is  not as unreasonable as I thought it would be ....

BOTTOM LINE: INVEST!

FINANCE TIP: COUNT YOUR PENNIES

I love shopping at neighborhood Delis! 

When we were living in Colorado, I got spoiled as we were privileged to be able to live in a good middle class community where we had the luxury of having an ambience both outdoor (scenic view of Cheyenne Mountain ) and indoors (attributed to  some sophisticated interior design of nearby stores ....I miss Par Avion and our local King Soopers!).

WHAT'S IT LIKE: I can still remember...the floor smelled like it was freshly washed with lemon polish ... the apples were so shiny that you can see your reflection as you walked along the fruit aisle . .the teenage diva wearing a Juicy Couture jumpsuit in the cheese area looked like she was on her way to a party, the old man who was buying a 1lb of roast beef in the deli looked like he just stepped out of the golf course ...and of course, there's me - -the 95 lb asian  in stilettos running towards the specials section, rummaging through the beef on sale! Yes! Digging her life to get a pack of sirloin or whatever beef cut was placed on the big sign: Sale of the Day!...and maybe she can catch some good slice of cheese and container of olives  if she was  lucky...

WAKE UP: Now, that we're here at the southern part of the US . I can't help but sacrifice the ambience and shop at the huge ginormodome grocery everybody calls Wal-Mart (I go to SAM's first). Not because I have to ........ I CHOOSE TO!

HERE ARE MY REASONS:

• Majority of the items I purchase are always 0.25 cents (or more) economical than the neighborhood grocery
• I discovered that some Equate brands are as comparable as the leading brand. I am an expert in marketing and a big snob on brands, so trust me when I say that as a consumer , I executed my own blind test comparison to prove my point. To name the Equate items I find that has no differential advantage than the leading brand:
•         Mouthwash
  • Face pads
  • Apricot Scrub
  • Face Wash
  • Acne Gel
  • Hand Moisturizer
  • Mozarella Cheese
  • Pretzel
  • French Roast Coffee
  • Onion Garlic Pasta Sauce
  • Salsa
• Where can you find a recently released DVD for as low as $7.50 and $5 on some hit movies
• Did you notice that they always run out of eggs? A good indication that supply turnover is faster
• Have you tried shopping on a Saturday morning and there's selection of breads and cakes at 40% off?
• Have you walked through the teen section and realized that majority of the basics (inner shirt, jogging pants) cost less that $8?

LIFE IS ABOUT CHOICES: As a professional, even if I can stretch my dollar more than the average hourly employee at Taco Bell, I refuse to pay an extra penny for a product that has no differential advantage over the other. Definitely, I will miss the shiny apples, Juicy Couture diva girl, old man golfer in our old deli and grocery in Colorado but at the end of the day , Its not about being cheap! Its how I choose to use good sound judgment to make a decision that every 0.25 cents difference I can save , even in the smallest item every week can make a big difference as I move closer to my million dollar dream in 10 years.