This evening I’ve been updating my blog. There is so much to talk about and so little time. I now realized that it is 11:10PM so I need to finish up and go to bed. The little one is in bed and I’m sure she will wake up early. In the mist of updating my blog I found Money Saving Mommy’s blog on 2009 goals Her blog always inspires me to save even more. I have to admit I’m not as good a saver as other bloggers have been and it really helps to see others who believe like we do.
In 2008, we had our wonderful daughter and realized that we had to do better about our finances. We knew we had to start a 529k and we need to save more than we were. Right before I had our daughter we visited a financial advisor. I decided I wanted to talk to Ric Edelman‘s Financial group. I’ve listened to him on the radio for years and I’ve read his books including The Truth About Money.
We met with a very nice advisor who took his time and step-by-step talked us through what we should do. (This was a recommendation for us only. This is not a recommendation for everyone.)
We already do the following:
1. Pay off all credit cards each month. (I personally like to use credit cards because then my husband and I can track our purchases. It’s harder with cash only. In addition, I don’t like to use a debt card because in the past we have had someone steal the card number and you can imagine what happened next. Not fun! I completely understand the concept of using cash only too. It just doesn’t work well for us.)
2. Save 20% of income
3. 6+ months of expenses for emergency fund
He recommended the following:
1. Pay off our school loans – Done. Used cash reserves.
2. Pay off our car loan – Done. Used cash reserves.
3. Increase life insurance – Still need to do this. Got a quote and need to call back to start process.
4. Sell extra stock that we own. – Still haven’t done this because that was when the market went down so fast. I’m thinking of keeping it.
5. Increase 401k contributions to max out – I’ve done this but my husband is about to do this.
6. Start a 529k for our daughter – I’ve applied for the application packet. I did some research on each of the programs and we will benefit better by doing it in our state.
7. Get a home equity line of credit – Still looking into this option.
We live in a very expensive area. I’m so impressed to read about other bloggers that have paid most of their mortgages off. In the future, that might be something I will add to my list. If you are familiar with Ric Edelman’s books you will know that he has a different view about paying off mortgages. He thinks it’s better to keep a large mortgage and have the extra money you would have put towards the mortgage to invest somewhere else. I can agree to this as long as you can make more than the cost of the mortgage. Again, everyone’s situation is different.
Off to bed..will update again with 2009 goals.