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The 5 Financial Habits I’ll Keep

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Every year we start out with new financial goals. 

The 5 Financial Habits I’ll KeepIn 2011, mine were to:

  • Increase my retirement contribution
  • Increase my long-term savings account
  • Increase my emergency fund
  • Increase my stock market investments

In addition to increasing my overall savings, my boyfriend and I also started looking for ways to cut back on other expenses. 

This is what we came up with:

  • Eat at home more often
  • Reduce the cable bill
  • Hang laundry on the line outside when it's really warm out instead of using the dryer

Except for my retirement contribution, the savings are going to take a hit this year because I've decided to go to law school.  Since I don't want a lot of debt, I'm going to try and pay for 30-50% of my tuition every year. 

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So, my savings goal has certainly changed; however, the remaining habits have stuck and should continue not only throughout the rest of the year, but for the rest of my life.

1. Continue with the increased retirement contribution. Since I will really only have an emergency fund over the next 4 years, I'm keeping my contribution at its current percentage, which I increased in January. Since its something I cannot touch, I know I'll be happy when school is over and I still have something to show for my retirement.

2. Keep my stock market investment. Although it's not much, (a few thousand dollars), I'm not going to use my stock market investment towards my education unless I absolutely have to. Even though it's not a huge amount, my dividend payments are significant enough to warrant just letting it sit and earn some money. Also, I don't have this money readily available, so it should be easy to keep where it is.

3. Continue to eat at home more often. When we first started this habit last year, I was mainly focused on formal sit down restaurants. However, the trips to Subway, KFC, etc. also add up. Even though those visits don't appear to cost much, just one trip for two of us costs between $15 and $20. By reminding myself that I have food at home and not stopping at least once per week, we can save between $780 - $1040 a year.

4. Cutting the cable bill. I have to admit, I watch way too much TV sometimes. However, all that will change for me once school starts. So, I decided to cut HBO, the extra cable box, and reduce our package to a cheaper one. We just started this about two months ago, but it should save me approximately $40 per month, or $480 per year.

5. Hanging out the laundry. Last year, we started hanging out the laundry in the summer and on other warm days. Because southern California has many warm days, there was really no excuse not to do it. Just by not using the dryer, we found our energy bill dropped anywhere from $20 - $30 per month.

Although none of these tricks will make us millionaires, they certainly make a dent in expenses when added together,with savings amounting to $1500 to $1880 a year. 

What are some habits you have that keep your savings up and/or expenses low?

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A Debt-Free Graduate's Decision

Cheryl BigosCheryl Bigos

Cheryl Bigos graduated from a CareOne Debt Relief Services Debt Management Plan (DMP) in 2008. She is now blogging about life as a DMP graduate in the My Journey out of Debt blog. She works as a Purchasing Manager in California, teaches Pilates, and lives with her boyfriend of four years. Cheryl is looking forward to sharing what she has learned from her experience in the DMP and after! Look for great tips about life ‘after’ debt! Compensated Blogger for CareOne Debt Relief Services.

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  • Combine trips, turn up thermostat 1 degree, cut food waste, turn down water heater and wash in cold water, change all bulbs to flourecent.

  • What vacuous obvious advice.  Please don't waste everyone's time with this "reporting".

  • Trying to pay 30-50% of tuition for law school?  What happened to the idea of paying all of one's tuition?  Huge student loans are a bigger weight on future financial stability than most people realize.

  • If there is two persons working in the household, live on one salary and save the other! It works!

  • You mention some ideas that in a stable non-volatile economy say 40 years ago may have worked, but you have to realize in today's unpredictable volatile economy and government controlled environment you can not do S _ _ _ when face with stagflation (wages dropping while government continues to print more and more money making it worthless and therefore causing inflation and theft of your savings and investments through inflation (rising prices) and your stocks, savings becoming worthless over time. Meanwhile you continue to not get raises and your wages drop due to global economy pressures upon American workers even if they are lucky enough to keep a JOB! WAKE UP the rules have changed we are no longer living in a stable economy and both inflation and deflation are going to wipe many of us out. Want to know how to save money. Live like the homeless who do not have a job or money, go to homeless dinners to save on groceries. Find ways to become multi-skilled or talented so you can make money doing anything and everything Study not only stockmarket investing but more importantly commodity investing and use of options so you do not loose your shirt in the process. Do not depend on stocks for retirement. When the depression kicks in many of these companies will no longer exist. Learn how to invest in other markets and build a gold -silver precious metals cache of valuable coins because last depression they did force owners of gold bullion to turn in their gold. Then the government raised the price of gold after confiscation, to kick start the economy after reissuing it at the higher price. Only save precious metals in form of coins , because it is a lot harder to determine value and the government can not take yours unless they pay you, they won't want to bothered by numismatics and coin evaluations. Realize that what worked in the past will most likely fail or not work this time around. (this is not your father's economy where you could get a job and retire with a gold watch). Eliminate stuff that is not essential to survive. Look into investing in tax sales in other states where the possibility exists not only of making a good interest rate 12-25% but maybe owning a property if owners fail to pay off back tax and certificate. Banks do not pay S_ _ _ . in terms of interest rate for savings or CD's. Think about living your life differently. Do not assume your job is secure, IT IS NOT! Think about becoming a business owner or ways to invest. Recognize there are no guarantees in life other than death and taxes which will go up. This does not mean you can not believe in God, but realize God only promises to meet your needs not your wants which for many Americans are excessive and unreasonable considering they have no savings or outside income. Do not assume college degrees = jobs this is nonsense. College degrees for most =long term debt that can not even be wiped out by bankruptcy., What are you going to do when you can not even find a minimum wage job and you have over 100k$ in student loan debt? This is not your father's economy.

  • Going to law school is the worst investment you could make at this point, considering how saturated the market is.

  • Sarah is right.  They should stop giving out law degrees for at least five years.

  • "reduce" the cable bill?  Are you kidding me?  Get rid of it entirely!  I wouldn't think you would have time to watch any tv anyway since you're going to law school.

  • Sarah and Mark are hitting on a valid point. Law school at this point will only set you back. Perhaps you are riding on the pink cloud after getting your finances better aligned.. Such a feeling can cause a sense to go on and tackle a bigger challenges but I can assure  you there are SO many legally trained people in the market already- many with JD's who don't practice because they ended up in alternate avenues of work. Have you considered not only the part of your tuition and costs that won't be paid upfront but the cost of malpractice insurance once (if?) you land a legal practice job? And, getting into the field often takes working at internships (translation- pro bono) for months, sometimes years before moving to a full-time job. Oh, and that was back when the market was stable.

    I see you live in California so you might be attending one of the non-ABA approved schools or even a distance program. Some of those run very high cost-wise for what you will be gaining in the long run. If you have not done a cost benefit analysis it would serve you well to do so. Law school is, and should not be a whimsical pursuit. I suggest spending a full week or better yet a month going to classes on an audit basis before signing up.

    If you are still determined I encourage you to look at the Public Service Loan Forgiveness program. Jobs in the public sector are a lot less common with the economy the way it is but there may be an opportunity to reduce your expenses after the fact.

    Good luck.

  • This article is not titled "Should I Go To Law School?" -- let the woman pursue her dream.  And RG, I imagine her tuition will be expensive, so maybe 35-50% is a lot of cash to put down right away.  The argument of "why don't you just have more money?" might not help as much as you think.

  • Wow!  I'm not claiming to be an expert - I'm just an everyday person asked to write about the experiences and habits that have worked for me.  I had no idea it would be so offensive to some.  I welcome any advice you have that isn't so "obvious" or "utter pap."

    As far as law school, I am going to an ABA approved school.  I knew that would be important when looking for a job, or if my bofriend and I decide to move back east.  I've thought about law school for years and am 41 years old so this is definitely not a whim.  I blogged about my decision in another article on this site.

    Phil, you are correct.  I do not have the almost 100k it will take in cash to pay for my tuition and don't know anyone who does.  My goal is to keep my debt between 50 and 60K, which, based on my calculations, should be doable.  

    @Bret, I do live with my boyfriend who wanted to keep the cable for a bit.  If he decides it's not worth keeping, then we'll cancel.

    Thanks for your comments and stay positive!

  • "Since I don't want a lot of debt, I'm going to try and pay for 30-50% of my tuition every year. "

    So she is going back into debt??? Explain to me why I should take these teachings seriously.

    Two words.......Dave Ramsey

  • I am a 41 year old partner in a reputable national firm and liked your article until the words "law school" made my blood run cold.   I would recommend you think long and hard about law school.  You seem bright and hardworking.  You are going to lose 3 years of income and incur significant debt for a job that, on average, will pay you $65k a year.  You will be 44 or 45 when you get out, meaning you could realistically be making loan payments until you are 55 or more.  I suppose a Stanford or Bolt (esp if you go the other coast) might be a good move, but going to an average law school at this time could be a really brutal experience for you.   I'm not trying to be a dream crusher, but take your talent, your savings and your student-loan free life and think about something else because law school is a real bad deal right now.  Also, if it were me, I'd stay out of the markets unless you really consider that the equivalent of vegas money.

  • Edcarnold, of course there will be debt - I am going to law school.  This isn't credit card debt I'm going to rack up because I have to have a Luis Vuitton purse.  I do read Dave Ramsey sometimes and believe his teachings are right on point.  However, I'm not quitting my job, and did not take this decisions lightly.  

    rfk, I've thought long and hard about law school for 20 years.  This isn't stated above, but I will have a job waiting for me when I graduate!  I didn't go into detail about this because I've already blogged about the decision in another article and this was not the purpose of my article.  I won't be loosing any income because I'm going at night and will continue working during the day.  I'm not a recent college grad with undergrad debt that decided to go to law school because I couldn't find a job!  I have a job, and a legal department here at work that I will be interning with who may have a job for me if my first job doesn't pan out for some reason.  

    Although I didn't go into detail about this either, my stock market investment is two ETF's - exchange traded funds that pay dividends.  They are not regular stocks.  Even though it may not be a good idea to leave it in there, it's pretty bad all around with banks, money markets, etc.  It may be a good idea to just stuff some money between my mattresses and hope for the best!

  • Congratulations, Cheryl for having a plan to realize your goal of going to law school.  When people have a financial plan, that gives them the best chance of success.   It's when people don't have any kind of plan that financial ruin occurs - like myself - just constant overspending on whatever I wanted using credit cards is no way to live life.

    I like your comment "This isn't credit card debt I'm going to rack up because I have to have a Luis Vuitton purse."  Dave Ramsey has some great points, and his methodology has worked for a lot of people - so I'm not bashing at all.  It's just that many Ramsey followers seem to think that his way is the only way to be financially successful.  People have been, are, and will continue to be financially successful by other means than purchasing and following his program.

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