Health Insurance Changes and my Employers Open Enrollment

I have worked at my place of employment for almost a decade and have participated in their health insurance plan since I qualified for open enrollment. Over the years I have noticed the decline in coverage matched by an increase in costs. Years ago my employer switched to a High Deductible Health insurance plan to keep employee and employer costs low and allow the opportunity to use a Health Savings Account (HSA) in order to cover the high deductible. Earlier this year I decided to Maximize my 100% employer price matched HSA contributions to the company allowed maximum of $24 dollars per week. After participating in my companies Open Enrollment and being informed of a change in insurance provider as well as an increase in deductible in order to keep my cost of health insurance the same. In order to compensate for this increase the weekly HSA contribution maximum still 100% price matched has been increased to $29 per week.

Having not much else of a choice for affordable insurance and being that I am a healthy individual I have no problem with a high deductible insurance plan. I think high deductible health insurance plans are a possible fix for future health insurance cost problems. I actually come out ahead because of my health insurance. The increase in deductible of course will change how much money I have in my pocket next year so I referred back to my write up on Payroll Adjustments for a link to a great tool to find out how payroll adjustments will affect my take home pay. Investing in mutual funds in my HSA as well as the immediate doubling of my money from my employers 100% matching of contributions allows my HSA to grow quickly and any funds that do not get used to pay towards my deductible will continue to grow over time.

Why I chose a Roth IRA over a Traditional IRA

The way I see the difference between a Roth IRA and a Traditional IRA is tax free vs. tax deferred. I had to choose if I wanted a tax break now or later or as I see it from now on. I decided against getting a tax deduction on current contributions into a Traditional IRA and saw the long term benefits of a Roth IRA which will provide me with tax free growth inside of my IRA as well as tax savings in the future when I start to withdraw my money in retirement. I would much rather pay known taxes now than to guess what the taxes I would be paying in 30 or more years on my IRA withdraws. I am currently 27 years old and am working on maximizing my IRA this year, if possible, and if not this year 2010 will be the first year I maximize my IRA contributions and I will continue to maximize my contributions for as long as I can. Maximizing any type of IRA contributions over the long term can accrue a vast amount of savings. But the golden opportunity that I see with a Roth IRA is not the amount of savings I can accrue but the tax free growth I can turn my savings into using dividend reinvestment over time.

I am not a financial adviser, this just what I am doing but thus far I am quite happy with my choice. Although in the future I may change my mind. Another idea I have been toying with is the possibility of also opening a Traditional IRA and splitting my maximized yearly IRA contributions between the two. The current tax break of a traditional IRA is nice and if my future tax rate decreases the traditional IRA is the way to go. However, if my future tax rate is the same as it is now or more the Roth is, in my opinion, the best option. I am not willing to gamble on the idea of my taxes being lower in the future because I don't live off of all that much now. I don't see my future retirement income causing a tax bracket reduction by today's standard so I think it is safer to assume that will apply in the future as well, although for all I know maybe all tax rates will be higher for everyone in the future. The Roth IRA is my hedge against unknown increased tax situations in the future. Perhaps using both he traditional and Roth IRA types for my contributions could cover me halfway for whichever situation the future holds, higher taxes or lower taxes. If I choose to implement the dual type of IRA idea I of course will report it.

For my current Roth IRA choice and if I choose to also open a Traditional I use Sharebuilder.com and have been very happy with them for a few years now.

Unexpected Christmas Bonus

I was notified that I will be getting an unexpected Christmas bonus of $500 on my next paycheck. Problem with bonuses is I would like to know how much of the bonus I am going to have after taxes. Just as I have found and use a payroll adjustments tool CalcXML Payroll Adjustments. I have also found a Bonus calculator to answer my question: How much will my company bonus net after taxes? The answer is at CalcXML with their Net Bonus Calculator. With this tool I was able to see how much of my bonus I am actually going to get and can plan to use it accordingly.

Investing in Mutual Funds in Health Savings Account

Having a high deductible health insurance plan and a health savings account has proven to be very beneficial to me thus far. I am a healthy individual and the greatest thing is that my health savings account (HSA), which my employer 100% price matches, is growing into a decent nest egg that will stay with me for my lifetime. Recently I have decided to take up the option to invest a portion of my HSA funds into a few mutual funds available to me. Out of about 15 available funds I carefully researched all of them and chose what I felt were 4 winners that were no load, having a great morningstar.com rating, and a prospectus that I found worthy of my money. I chose a minimal amount to maintain in my health savings account that was $1000 higher than the absolute minimum in order to make sure I can meet my high deductible should a medical emergency happen and also in order to help earn enough interest from the savings account to pay the $3 monthly fee. As my HSA savings account grows past my minimum balance the extra money will automatically be transferred into an investment account and then invested into the mutual funds by the percentages I set. Hopefully I will earn a great return in the long run by making the decision to invest the bulk of unused money into mutual funds from my HSA. With a large HSA nest egg in the future I will be able to use the funds to help me as I get older and my health begins to fade. As long as I have a high deductible health insurance plan I can contribute to an HSA. If I build up enough of a nest egg through the use of mutual funds and compound interest even if I can no longer contribute because I switched back to a traditional health insurance plan my HSA should continue to grow. In the future I will still be able to use the HSA funds tax free for medical expenses. It's best compared to an IRA but instead of retirement an HSA is for medical expenses. Although if I really needed to I could pull the money out to use it for non medical expenses or emergencies but I would be subject to taxes and other fees. I will later report how my mutual fund choices are working out and also update in the future my thoughts good or bad on having an HSA.

Failure is Always an Option, That is Why Success is so Good.

2009 is coming to an end and it's time to set some real goals for next year. Here is my list my personal finance accomplishments this year (2009) followed by my list of goals I plan to accomplish next year (2010). I have spent 2009 learning to save, paying off debt, and appreciating wealth. I made a lot of changes including the decision that I don't want to be poor living paycheck to paycheck, I want to own the things I have and not pretend like I do, as so many indebted Americans do. In my quest to attain wealth I did the following in 2009.

1. I increased my pretax 401k contributions from 1% to 5% taking advantage of my employers price matching of up to 4% of my contribution on July 1, 2009 at one of my company's two open enrollment periods.

2. I maximized my Health Savings Account pretax contributions taking full advantage of my company's 100% price match on January 1, 2009.

3. Over the course of the year I began to setup automatic savings plans for my Roth IRA, my Investment Account and multiple Online savings accounts. I started with one account at a time and increased how much I put more into savings and investments little by little.

4. I paid off my highest interest credit card as well as another credit card account, and implemented the practice of paying off any balance in full every billing cycle. I still have one last credit card with a balance that I am working on.

5. I made the decision to go back to school and have almost completed my first semester back in six years (Fall 2009). I am also shooting to get my moneys worth out of school as an adult. I have a few weeks left of school and am looking to finish this semester with great success. I am expecting a 4.0 GPA for this semester and I have high hopes to continue my success until I attain my Bachelors. Sacrificing free time and my personal life in order to study more is helping me to spend less because I can no longer go out and spend money regularly.

6. Although it hasn't been fulfilled, I did converse with my boss about a raise, and even though I did not and will not attain this in 2009, I have had very promising discussions with my employer the possibility of it in the future, sad to say it may not be near future, but through my discussions I received acknowledgment of my constant hard work and excellence at my job which at least was very rewarding even without a raise.

Below are my goals for the year 2010.

1. On January 1 my first Open Enrollment for my retirement plan at work I am going to increase my pretax 401k contribution from 5% to 10% of my pretax income taking more advantage of paying myself fist by saving more money before taxes.

2. Based on my 2009 automatic Roth IRA contributions I set up in the middle of the 2009, in 2010, I will Maximize my Roth IRA automatically with my automatic savings plan at Sharebuilder.com.

3. If possible, with any extra money and extra income I plan to maximize my 2009 Roth IRA contributions before the April 15th deadline.

4. I plan to further pursue a pay increase with my employer, especially if the economy starts to turn around. With our current economy my company is currently in a slump and that has a large effect on the freeze of pay increases.

5. At the second Open Enrollment for my retirement plan at work, July 1 2010, I plan to maximize my pretax 401k contributions to my company's max of 15% finally reaching my goal of truly paying myself first.

6. Finally I plan to come up with new ways to reduce my spending and still maintaining a lifestyle I can enjoy. I will continue to practice and develop good habits for saving, investing, and growing wealth.

Through the above goals I plan to increase my net worth, improve my savings and investments, make the most of my retirement accounts, and eliminate my leftover debt.

Personal Finance Tools and Informative Sites

Here is a simple list of Tools, Blogs, and Websites that I use and or have found that could be of great value to everyone.

Free personal finance tools that I use:

Mint.com - Manage Your Money
DueMinder.com - Tools to Eliminate All Debt

Other free personal finance tools I have found:

Buxfer.com - Easy Online Money Management
JustThrive.com - Watch Your Money Grow
Yodlee.com - Monetizing Online Banking
Quicken Online - Free Money Management
Money Strands - Money Management

An affordable tool:

PearBudget.com - Really Simple Budgeting, $3 a month

Personal finance blogs and websites I visit regularly for ideas, advice, thoughts, and even news and current happenings in the world surrounding personal finance:

Free Money Finance Blog
The Motley Fool
Morning Star
Get Rich Slowly Blog
The Simple Dollar Blog
Dividend Growth Investor Blog
Savings Toolbox

For personal finance books I am reading or have read see my Personal Finance Library to the bottom right.

My Simple Way to Get Out of Credit Card Debt

The way I chose to get out of credit card debt may not be a secret but it seems too many people aren't familiar with it. The way I chose to reduce and eventually get out of credit card debt is simply to stop producing it. I forced myself to take control of my spending. With discipline and practice it proved to be easier than originally thought overall. In the beginning it was tough but I stopped spending money on things I thought I needed but didn't really need. I had to stop being a wasteful spender and begin spending within my means. Very popular phrases everyone seems to know: "live below your means" and "spend less than you earn" if only everyone actually practiced what they already know. I had to make sure that my monthly spending on bills, living expenses, and paying off debt never exceeded the amount of money I earned each month. My first step to debt reduction was to stop producing more debt. Using Mint.com I was able to identify my spending trends and dig down and find not the big expenses that I thought was producing my debt, but the smaller $5 here and there expenses that were adding up to a majority of my credit card spending every month. Next, I created and followed a proper plan for paying off debt efficiently. Learning to live and accept what you have is very important to reducing debt and saving wealth. In the past it was too easy for me to fall into the past time of "keeping up with the Jones" and excessive spending on credit in order to "look" more than I am actually worth. Controlling our internal consumerism might be difficult but it is a lesson that I believe will pay off over and over. The best thing yet I have learned in my personal finance is that I want to be able to retire at a proper age and I want to attain personal wealth allowing me to live comfortably along the way, however, pretending that I already have reached those goals and spending excessively wasting money on possessions and things I don't need will never get me there. After paying off all of my high interest debt I plan to stay out of debt and invest in my future while practicing proper money management.

Payroll Adjustments and Take-Home Pay

Next year, 2010, when available I plan to maximize my 401k contributions. The only problem is I do have a minimal cost to survive and I have no idea how the payroll change will effect me. In order to successfully pursue wealth I need to know everything about my money whether it be my income or expenses. If I knew how this payroll deduction change would change my take-home pay I could budget and plan to change my spending habits to match my reduced available cash accordingly. I have found an amazing free online tool at CalcXML Payroll Adjustments Calculator that calculates payroll deduction changes and even allows me to export the before and after to PDF. Thanks to this tool I am able to fully educate myself about my income changes. Without the use of this tool I probably never would make large changes to my payroll deductions willingly. Knowledge is my number one tool I plan to use to gain wealth.

I should have maximized my 401k contributions from my first day of employment. It is a shame that it took me years before I decided to make the future reduction in take home pay, but better late than never. The more I put aside for retirement the better which will add to the weight of my 401k in addition to my other investments. An added benefit of maximizing pretax deductions is the tax benefit. Increasing my pretax contribution reduces my income, reducing my tax liability, which can keep more money in my pocket come tax season.

Impulse Buying

Despite all of my best practiced disciplines for saving and reduced spending I still have one recurring challenge I have to face, the urge to buy on impulse. The biggest spending season is just about here and I must remind myself of the importance of controlling my spending, and knowing the difference between a want and a need. I think through the year of all my hard work depleting credit card debt and instituting savings plans it is only right that I maintain my disciplines as holidays arrive. Overspending is far to easy in this consumer society. My goal this year is to not buy anything whether for myself or a present for family and friends on credit. I want to pay cash for everything I buy. In the past it has been far to habitual to ring up a large credit card debt and then take half of the following year to pay it off. I am thinking of gifting everyone with a well picked humorous card and some cash or a gift card. This will probably save me quite a bit of money in the long run by not having to pay interest and in this recession I think everyone can appreciate the value of money, even if it's to their favorite restaurant or retail store.

This year I am also going to work on really understanding what a deal is. Just because something is 50% off doesn't necessarily make it a deal. I may pay less but if I don't use whatever it is I buy and get my moneys worth out of it it certainly wasn't a deal in the long run. In the past I must regret that I have purchased things on impulse because I thought it was a good deal, years later I have used such things only a few times. I don't really need any more stuff. From now on I am going to try to make sure that everything I buy that is not a direct need will at least be a want that will pay off through regular use.

I think controlling my impulse buying through this holiday season, and preventing the use of credit I can avoid debt and save on interest allowing me continue my focus on my quest for wealth.

Automatic Savings Plan

Saving is difficult, paying yourself first is difficult, and spending less than you earn is difficult, however, I have found the easiest way to trick myself into saving more. I simply force myself to have less money available for spending automatically. Through the use of automatic savings plans set up at multiple online savings accounts and even my investment accounts I am able to pay myself first every Friday after I get paid. My direct deposit happens on Thursday so the money is available for my savings plans to take the money from me first thing Friday morning before I even know it's there. By the time I check to see how much money I have in my checking account that money is on its way to a savings account that I do not have immediate access to.

Out of site out of mind. Online savings accounts are great because they keep the money where I can not quickly access it which helps to prevent impulse buying because "there is no cash burning a hole in my pocket". Reducing the amount of money in my checking account immediately means that I don't miss it. It simplifies saving because I don't have to do anything. This forces me to simply learn to live on what is leftover. My current goal is to slowly increase the weekly amounts I put into my online savings accounts via automatic transfers after I have learned to live accordingly on the lesser amounts. Care must be taken not to go overboard reducing the means I live on to much too soon. The changes should be done gradually starting small, the goal is to reduce my means an saving the difference not burden my life. With the knowledge of living on less I will be ready properly handle money should I get a pay raise or a bonus. Instead of just spending the extra money I will easily be able to add it to my savings and never miss it.

It is a dilemma to make more money with poor spending and money habits, I am guilty of that myself. Far to often earning more money means spending more money, but automatic savings plans are a great way to save and to teach yourself that you can live on less. I only wish I learned this lesson earlier in my life.

Four Steps to Begin my Quest for Wealth

The four steps I developed that have worked for me to begin my quest for wealth.

1. I Identified how much I make and created a budget. On my budget I set numbers for all of my bills, debts, spending money, and living expenses. My total income is the maximum amount I can spend period, my goal is to spend less than I make. Strictly following a budget has prevented me from overspending and ringing up credit card debt.

2. I identified my amount of debt and started working on incorporating payoff into my budget in order to reduce my debt. Tackling the highest interest debt first is always a good starting place to pay extra.

3. Once I started hammering on my debt I added $5 a week into my buget to automatically go into a savings account.

4. I made it a rule to reevaluate my budget at least quarterly in order to increase the amount I automatically saved. I started with $5 a week and planned to increase the amount saved every quarter once I have taught myself how to live on my reduced leftover income from my budget.

Strictly following these four steps has allowed me to begin and become set in my quest for wealth.

For tools and more advice see my other blogs:
Free Financial Tools and Advice

Debt Management with DueMinder.com

Mint.com and Why I Love it

Saving More With Free Software

I have found that there is quite a bit of money to be saved for my personal computer through free tools and open source software. By using free tools and software such as free anti virus software other free programs you can prevent the need to spend money or recurring costs for your needed protection and abilities on your computer.

After having paid for anti-virus software every year for many years I decided I would much rather save that money. This led to me trying some of the free anti-virus programs. I tried both AVG and Avira but I prefer Avira, it is very light weight and although it displays a pop up advertising its paid version every time it updates it is a very good anti-virus program. I decided to switch to the free Avira instead paying for anti-virus every year. Beyond saving money on anti-virus I have found some other free utilities that can help keep my computer clean and performing at its best. Malwarbytes and Auslogics Disk Defrag can help keep your computer free of malware and spyware and keeping your hard drive defragmented for peak performance.

As for productivity software I have found that for a spreadsheet program or a word processor Open Office is a great free program to replace the cost of Microsfot Office. I have even had success using the online Google Docs. The savings from these isn't much but when added to my savings plan it will add up in the long run. Every extra recurring dollar I save can help add up over the years. Why should I pay for service that I can get for free.

Property Taxes are Back Again

The time has come once again for me to pay my local property taxes. As always I am given the breakdown of reduced cost if I pay early, something I will most definitely take advantage of. My goal this year is to pay my taxes with my credit card and earn rewards parts for it, of course I will pay off my credit card and this large purchase with freed cash from budgeting and relief cash from my savings nest eggs that I have been slowly building.

I will not be using my credit card as a loan in order to pay my taxes this year as I have done in previous years when my spending and savings habits were poor. From past experience I have learned that if I need a loan I should get a loan, available credit isn't a loan. The interest rate on a loan is much lower than that of a credit card unless it is a pay day loan. I would treat credit card debt and pay day / high interest loans the same and create a plan to pay them off as soon as financially possible no matter what. Any time that you cannot afford to pay for a necessity such as your taxes and you must use a credit card in order to get by I must recommend that you follow what I have learned and before you make the credit card purchase you create a complete repayment plan in order to pay off the debt as fast as possible. I personally use the free website Dueminder.com which is a great tool to help me manage debt and prompt repayment for those times when I just cannot pay cash up front. Depending on the credit card every day past the payment due date or scheduled period end date begins the process of interest compounding against me, which in turn means I end up paying more than I should have for say something I wanted to pay less of, such as taxes. Budgeting a savings plan to meet the yearly goal of your estimated taxes can save you money in credit card interest as well as help you earn cash back on credit card rewards.

Free Financial Tools and Advice

I've found that the best way to improve personal finance is through proper use of tools, advice, and improved knowledge. What better way to improve wealth than free tools and advice that actually help me control my money and spending.

You may have seen their commercials on television, I have found Feed The Pig is a great free starting point for savings and money advice. I signed up for their weekly savings tips and am glad I have done so. Not all of the information is always relevant to me but every week or so I get knowledge encouraging thoughts on advice for my taxes, savings, debt, and more. I love free financial advice to my email in-box on a regular basis, I am glad I found and use this site and service.

A few of the powerful but free tools that I am currently using for debt management and money management are: Mint.com and Dueminder.com. In my search to find more tools that I can use to improve my finances I have come across a few more free sites that may prove to be fantastic financial management and planning tools Wesabe.com, Geezeo.com, and Simplifi.net. Although currently I haven't done anything but visit the websites and view the demo, I may give each one a try and see any one fares the best for me. The choice to use any one of the above mentioned money and personal financial management sites above is the first step in allowing you to take back control your own money.

Remember that in order to control your spending I have to understand what it is I am spending my money on. I use my free online money management tools to allow me the ability to see trends and transactions that help me identify where my money is disappearing. With this knowledge I correct spending habits and enjoy the benefits of having more money left over at the end of every month. It is this extra money that I find, that I use to boost my investment in my future wealth.

My Health Savings Account May Really Pay Off

Every year it seems that health insurance costs have gone up and my employers health insurance gets just a little worse. At least that is what I thought three years ago when my company switched from standard health insurance to a high deductible insurance plan with an Health Savings Account (HSA) option. At first I didn't see the value and only contributed the minimum amount to my HSA which surprisingly my employer matches 100%. I regret not maxing my HSA from the start just like I regret not doing the same with my 401K, however at the beginning of this year I decided to maximize my HSA and I am glad I did.

A high deductible insurance plan is a health insurance plan with pretty much the same coverage of my previous regular health insurance plans except that it is lower in cost for me and a much much higher deductible that I have to be pay before my health insurance begins its copay coverage. I like to think of it as my insurance doesn't assist until I've paid a specific amount out of pocket first. This is where the Health Savings Account comes in, an HSA is a lot like an IRA with the way it works. You invest into the account which lasts forever so you don't have to use it or loose it like other medical related accounts. Similar to an IRA the HSA has tax benefits, the HSA has to be used for qualified medical expenses or you face penalties and taxes.

Since the beginning of this year when I chose to maximize my HSA contributions which are 100% price matched, I couldn't be happier with how fast my account has grown. It has reached over $4000 in value and climbing quickly. As for my health insurance I can't complain because I am still young and healthy and so far my medical costs are very minimal so long as an emergency doesn't happen, however, if it does I have more than enough cash growing in my HSA to cover my deductible for my insurance.

I'm Starting to Love my Credit Cards

I am beginning to love my credit cards more and more and I have even ditched the regular use of my debit cards. I am using credit cards more for two reason security and cash back rewards. In order to love and embrace credit cards you must first not be in credit card debt. Learn to control your expenses by identifying your problem expenses with Mint.com and begin to control spending, then use a tool such as Dueminder.com to calculate a plan to pay off your credit card debt quickly.

Now my number one rule for credit cards is to never carry a balance. Credit cards are not a substitute for money that isn't there. I will pay off my credit cards every month treat credit card purchases as if my credit card was a check book, keeping track and only making purchases when I have the cash to back it. With this method I can rack up points and turn them into cash. An added benefit I see for this is that credit cards are generally safer to me than debit cards when used for purchases both online and in person. If you have ever had your check card info stolen you know that even if you aren't liable it is your money that disappears when you are compromised. Wouldn't you rather it be the card issuers money that disappears when you are compromised, that way while you are waiting to get the money back you still have your money in the bank.

I will not use more than one credit card at a time. I am going to alternate my two rewards cards per pay period using one card and then paying the balance in full. Then switching to the other card and repeating. This will hopefully rack up as many rewards points as possible and keep a revolving payment history on my credit accounts for my credit report which I believe is better than a dormant unused account. Once I've accumulated a substantial amount of points I will cash them. An added benefit is that while I am using and and paying off my credit cards I am using the issuers money interest free allowing me to keep my cash I in an interest bearing account earning a little bit of interest before I pay off the credit card balance in full.

In recap for this to work I must have zero credit card balance. I must also maintain proper credit card discipline, a skill apparently not many Americans know or practice. Through the repeat practice of paying off credit cards every month and never riding a balance, I hope to establish a strong habit in controlling my finance. By paying off the credit cards every period I will never pay a cent in interest and I will in turn earn interest on the money I hold in my interest bearing account plus I will earn a small but additional income from rewards points converted to cash. This supplemental income may be small, it will be just a few percent of what I spend, but if I use my credit cards for as many purchases as I can I have the potential to return the equivalent to an extra few weeks pay per year which I can then invest in order continue my quest for wealth.

Ways I am Trying to Live Below My Means

I see it everywhere by everyone with financial advice. In order to gain wealth one must live below their means. The following is about my decisions and choices I have made in order to not only spend less than I earn, but also spend less in general. Through the use of a budget and the fantastic money management help from Mint.com I was able to begin to identify where my money was going. Mint.com is great because it allows me to see and study trends about every single financial transaction I make. Here are my findings.

The single biggest money pit I have found is my cell phone. I was blowing $120 a month on my cell phone through unlimited Internet and messaging plus all of the other bells, whistles, taxes, and hidden fees. I began to study my cellular bill to find ways to reduce this recurring cost. We all may think cell phones are a necessity and in some ways they are, however, are all of the added available features we use really necessary? I decided that I was going to reduce the amount of text messaging I do per month as well as cut off my internet. I am lucky enough to have a phone with built in WiFi, allowing my use of the internet from any wireless hot spot on my phone. Through the minimum calling plan, the smallest text messaging plan, and cutting off my cellular Internet I was able to reduce my phone bill by over $60 which is going to save me over $700 a year. I think that much is worth not using the Internet a few times a month, and controlling the amount of text messaging I do.

Another problem was subscription payments. It is a difficult discipline to really teach yourself the difference between a want and a need, but I decided that all magazines and other subscription services for entertainment and the like were a luxury I did not need. After some time I convinced myself to cancel all recurring subscriptions that couldn't directly benefit me on my attempts to gain wealth. If it couldn't help educate me or positively benefit me I didn't need it and immediately canceled my subscriptions. Cutting these off will save me about $300 a year. Between my cell phone and the subscriptions I essential am going to earn an extra $1000 this year by reducing my expenses.

Next on my list was to reduce my utility bills, eliminate the storage unit I've had for years, and to reduce my credit card payments. Improving conservation can reduce your expenses. It makes sense to not be wasteful with things like water and electricity. A large burden on my yearly finance was a storage unit I've had since I moved years ago. Full of stuff I haven't touched or needed since I put it in there. My idea is to use Craigslist to begin selling things at no cost to myself instead of throwing it out or trying to sell it on ebay, beyond that I hate garage sales. Once I have sold everything of value and pocketed the cash I think I am going to donate what I can and throw the rest out. Once my storage unit is gone I will be able to save a good $600 per year. Last on my list was credit card payments. In order to remove all of my credit card debt and maintain lower monthly payments necessary to pay off the cards every month I am going to have to learn great spending discipline. It was time I learned the difference between plastic and money, because credit is not money. In order to spend less I needed to control spending. In order to control spending I took advantage of the tools available at Mint.com I researched where I was spending the most and did I really need to spend that money. In quite a few cases Mint.com allowed me to see that I had horrible spending habits. By reducing and controlling these habits I am hoping to be able to reduce my monthly credit card payoff amounts allowing me to more easily pay off my credit cards every month and even to pay off what debt I have in a more timely manner. I'm estimating that reducing my credit card spending and in turn reducing the pay off amounts I will probably end up saving at least $1200 a year or more assuming that I can reduce my monthly credit card spending by $100 or more every month.

Just an added note if you smoke, dip, or drink you should seriously think about quitting or drastically cutting back. Health concerns aside regular use of these is an incredible drain on your wallet. A few happy hours a week can actually add up to quite a bit of money spent over the course of a year. Drinking in a bar at night just once a week can rack up even more money necessarily spent. If you can't quit or are unwilling to, at least consider seriously cutting back or finding ways to spend less in doing so, controlling your expenses.

My goal is to use this extra money to eliminate all of my high interest debt and begin investing more, a serious advancement into my quest for personal wealth.

The Decision to go Back to School

I graduated from a community college in 2002 with an Associate of Applied Science degree and set out into the work force as an IT professional bright eyed and bushy tailed. I originally believed that a college degree was meant for getting your foot in the door and wasn't needed after you obviously had a good job and gained experience. That was 2002, it is now reaching the end 2009 seven years later and luckily I still have a job despite nationwide layoffs and cutbacks across the country, thank goodness I'm very good at what I do. I have watched numerous friends and colleges who were either very experienced or well education, usually never both, struggle to find employment after school or a lay off.

It is in this economy I realized the true importance of a strong education combined with great work experience. It wasn't just to get my foot in the door, it wasn't even so I look better on paper. A college education to me has become a necessity because it helps you to improve yourself. The more educated you are and the more knowledge you attain the better your ability to make decisions about pretty much anything and everything no matter what the topic.

With this I began the research of what to get my degree in. When I told folks about my decision to go back to college most asked if I would be getting another degree in the computer science field, and to that I had to replied "maybe". I couldn't really see the value in relearning the things I already knew after seven years in the industry. I was more interested in getting as much knowledge about everything as I could. I wanted to learn more about business, finance, history, writing, speaking, and even the dreaded math. And with this I found the Bachelor of Applied Arts and Sciences, or BAAS, degree. A degree that until recent I had never heard of but as I kept researching I found that more and more schools offered it.

The BAAS degree was designed for people with technical degrees such as myself who wanted to get a Bachelors without having to "start all over". The BAAS major is a general Applied Arts and Sciences and the minor is individualized and custom tailored to my preferences for my field or pretty much whatever I choose. As I looked into the program more and more I loved its flexibility and the fact that completion of a BAAS degree opened the door for a Masters degree should I decide to continue my education in the future. A very possible goal after completion of my Bachelors.

Some may argue that a Bachelor of Science is better than the BAAS, however, for me it wasn't about what someone else thought was better, it was about what is best for me. I didn't want to go back to school in order to help me with my job, although that would be a well accepted benefit, I went back to school because I wanted to become more intelligent in my journey to gain wealth. I think that in order to gain wealth one must first gain knowledge.

If you are thinking of the Bachelor of Applied Arts and Sciences verses Bachelor of Science or BS degree remember to consider yourself and which would benefit you more in your lifetime. I like to think of the BS as a more specialized degree plan which may be what you want or need, where as the BAAS is a more generalized and broad spectrum degree plan covering more topics and allowing me to take more classes that I chose instead of classes strictly chosen for me. Because I already have a career and specialized a degree as well as specialized knowledge I wanted to spread my knowledge into more areas, you may be the opposite. The decision to go back to school is a bold but great move for anyone and I think the options should be considered accordingly.

My Thought Process on Investing vs. Debt

I have four credit card accounts, I have paid off and implemented the art of paying the full balance every month on two of them, leaving me with two that have balances. Truly I actually care about one, I have a balance of about $3000 I need to pay off, I earned this balance due to a lack of an emergency fund I am working on establishing. I do not want to cease my current practice of paying myself first strategy (I send $10 a week into multiple online savings accounts and now send $96 per week into my IRA and $15 per week into my Sharebuilder.com brokerage account. My new goal is to finally eliminate all of my high interest credit card debt by the end of this year. I have made the decision and am in the process of reducing my spending to find more money and I have chosen to deplete some of my savings in order to eliminate the debt. I have learned to look at a riding balance on a credit card as losing a % of my hard earned money through interest compounded against me. It is a sad day to know that the money I have saved is about to be depleted, however, the weekly payments I make to myself will slowly rebuild my savings accounts and then the interest there won't be reduced by lost credit card balance interest. If you were wondering the reason I am only concerned with one of my credit cards riding a balance is because the other is on is a proprietary retailer credit card that I use about once a year to make a purchase that qualifies for their 12 month zero interest program repayment program. I have already planned out my course of action and payments to pay the balance in full in less than 12 months thanks to Dueminder.com on that credit card.

How I Pay Myself First.

In my quest to constantly improve my money management I have decided to do more than just think about paying myself first but to actually do it. I have come to believe that saving must become a priority and not just an added benefit of leftover money in order to build wealth. Building money and investments requires true dedication and commitment as well as constantly practiced disciplines. Without discipline and dedication spending less than you earn will never work and you will be on your way to constant credit card debt and pretty much end up either going downward financially or not improving at all. I think the problem with most people is they get stuck going no where financially. They save a little bit but the debt they ring up leaves them working hard for nothing, because they never improve. This was me, but not anymore.

Just as I pay bills every month I turned myself in a bill, because I had to be paid. To start with I have opened numerous online interest earning accounts. I have opened an online savings account with Capital One and both an online checking and savings account with ING Direct. And currently due to the the higher interest rates and my drive to pay myself more I am even thinking of opening an online account with Ally. Here is what I do currently with each of my accounts. I decided that my payment to myself should be a weekly bill and not monthly in order to shoot for growth and reduce the impact on myself. Therefore, from each of my online accounts I have set up an automatic savings plan to draft my checking account $10 for each account every single week after my direct deposit clears Friday morning. This may not seem like much and at first it isn't I do plan to increase these values as I become better at money management in the future. By taking the money away first thing I have paid myself first into accounts that I cant locally access, that I have taught myself to forget about building up a small cash nest egg. My goal would be to of course choose the highest interest earning accounts and use multiple accounts for different purposes. I use my ING Direct checking account as my emergency cash fund, and the savings account as possible capital to be used with funding my Sharebuilder.com accounts as they can be linked together for immediate transfers. And lastly my Capital One account is my sole forgotten account that I do not touch for any reason. My goal is to build up every online account I have to a minimum amount of $1000 in each account. Next is to continue paying myself and when I reach say $2000 open up $1000 Online CD's with each of the banks making my money untouchable to myself. As time progresses I hope to establish two CD ladders one at Capital One and the other at ING Direct. I do not expect this plan to get me rich by any means however I do believe that it will teach me the importance of paying myself first and prove to myself that I can do it. By removing the money immediately after I get paid it is as if I never had the money to begin with teaching me to learn to live on less money. As I master living on a reduced income, the goal is to increase the payments to myself until I have reached the lowest possible means reduced pay to live on. In the future I can use the established capital to invest and continue to use my acquired financial skill of paying myself first to earn more for my future.

Debt Management with Dueminder.com

I found another great tool other than Mint.com to use on my quest to reduce debt and build wealth. Dueminder.com is a fantastic Free Debt Management tool that that I have begun using. Once signed up to use Dueminder.com I was able to set up a Debt Reduction plan in their Debt Manager and add my debts (Loans, Credit Cards, and Mortgage). The Debt Manager works by setting up a debt reduction plan and adding your monthly commitment to the debt (the maximum amount you can afford to pay every month towards your debt) and then you choose your payoff strategy. Once your plan is created you begin to create "accounts" in order to add your debts such as your student loan from Citi, then your mortgage, then your Visa credit card debt to your plan.

Once you have everythign set up Dueminder.com can begin to shine for you. Depending on your pay off plan Dueminder.com chooses the best route to becoming debt free as fast as possible. Dueminder.com figures out the amount of your monthly payments per account to best way reduce your debt for each account and even calculates how much money you will save by following your debt management plan. It really couldn't be easier to figure out the best way to get out of debt quickly than with Dueminder.com. If things change you can modify your accounts and debt reduction plan at any time allowing the advice to always stay custom tailored to your needs and your debt reduction goal. You can even generate a recommended payment schedule so you will never miss or make a late account payment again. Laying out your future payments and due dates for each account is a great way to establish debt reduction and really help you snowball your debt problems. Through the use of easy to follow payment schedules, amount calculations, and even visual displays of how your guided payments will reduce your debt in the future debt management has never been easier. I have yet to find a better tool for debt management than Dueminder.com, and the best part is that it's free.

DRIP Investing - My Decision to Start Investing With Less Than $100

A few years ago I opened a brokerage account with Sharebuilder and started stashing what little money I could into my Sharebuilder money market trying to build up enough money to buy anything in the stock market. The very next year I opened a Roth IRA with Sharebuilder with the intentions of doing the exact same thing. I had been reading about DRIP investing and how it could help gain wealth and that anyone could do it, so I decided I was going to do it. My goal was to automatically send money to my Sharebuilder accounts every week after I got my paycheck in order to save up enough capital to start buying stocks.

How I set up my Drips. First and foremost all DRIP investing is is buying stocks that pay a dividend and reinvesting the dividends paid into back into the stock. Sharebuilder is great, although I am sure there are many other online brokers who do the same, because I can automatically buy a stock and pay only $4 however, when dividends are paid out from the stock I can choose to automatically reinvest them into more stock at no cost. This creates a sort of compounding slow money growing strategy.

My simple plan for both my brokerage account and my Roth IRA to set up a plan that automatically takes a specified amount from my checking account every week after I get paid ($15 into my brokerage and $25 into my Roth IRA), and then to automatically purchase a stock of my choice when my Sharebuilder account reaches $104, because I have to pay a $4 commission I add the $4 so I can buy $100 of a stock at a time. Sharebuilder allows the purchase of partial shares so I buy by the dollar amount not the share amount. This is a painfully slow process but over time it is starting to show that it will eventually pay off, in just over 2 years my investments between the two accounts are currently valued at over $6200 (10-8-2009). If I had just put that money into a savings account or CD it would only have amounted to about $5000. Because it is the stock market and stocks rise and fall in value the returns may not be that high in the short term, but increasing my portfolio with long term solid dividend paying stocks I think is really going to pay off. Due not I started investing in a horrible downed economy, however, that has actually really jump started my ability to buy more with less thus far, a solid start. Next year, 2010, I plan to max my IRA (around $96 a week to hit the current $5000 max). I am no financial adviser nor pro stock trader, however, I do research and find what I think is a good stock or fund to invest in one at a time. I keep buying my single chosen stock until I have built a good amount of shares $100 at a time in my portfolio and then move on to the next choice. For anyone who thinks they can't invest in the stock market because it takes money to make money please get that out of your head. I am slowly revolving purchases and building up a small portfolio with great growth potential from nothing. I started my road to investing with less than $100, although I didn't make my first purchase until I reached $100. As I become better at my own money management I will continue to try and increase the amount I send to my Sharebuilder accounts every week in order to increase my investment amounts and recurrences. Don't let your small amount of capital discourage you, anyone can become an investor, and better themselves easily through self guided education, practice, and strictly following a simple plan.

Mint.com and why I love it!

For years I have been told that in order to gain wealth I need to take control my income and expenditures. This is easier said than done, who wants to keep every receipt from every transaction and then review it later. I never did. That is when I found out about Mint.com which has proven to be a Godsend for me. There may not be a better FREE tool out there that can aid in your money management and financial freedom more than Mint.com.

Mint.com is a one stop shop for me to see every financial transaction from all of my accounts in one place. I was able to link up all of my credit card accounts, my savings and checking accounts, my mortgage, my newly acquired student loans, and even my investment accounts such as my Sharebuilder IRA and trading account, my 401k, and my Health Savings Account. The net worth calculator is quick and a fantastic overview of my value as I pay down debt and invest and save more money. I also love the ability to quickly see the various trends of my finances. It is great to be able to see it all calculated in real time. The ability to see all transactions by account or for all accounts has allowed myself the ability fully understand my overall average financial situation at any one given time. The road to turning $100 into something greater is a long and slow dedicated process and using Mint.com has allowed me the joy of being able to see my financial progress as a whole both good and bad and really brought about my understanding of what I need to do to improve spending habits, savings goals, investment goals, frugality, and just simply take control of my money.

The Budget features of Mint.com are the real icing on the cake. Through the use of these budgets I have been able to keep track of my spending habits and allowing me to fully understand how spending decisions both big and small really affect my finances. You would be surprised how quickly the small expenses can really add up and set you over your budget. The visual standing of my monthly budget set up via spending categories with the use of an under or over budget chart has helped me to identify new ways to save money and reduce my cost of living. By default Mint.com creates a budget for you according to your spending habits however another added bonus is the ability to customize your own budgets in order to custom tailor them to best suit your needs and goals.

Regularly Mint.com is updating itself with new features and tools, including finding the best deals for you on various credit cards, savings, online brokers, and more. There really isn't any reason why anyone who doesn't have or can't afford a financial adviser shouldn't be using Mint.com. If you are worried about thoughts on security risks of allowing Mint.com to store all of your financial log on information you have a valid concern. I have been using Mint.com for months now and I absolutely love it. The website is verified secure and I feel personally that my own personal computer is more of a risk due to virus's and key logging than using the Mint.com website for my finances. I choose to pay for identity theft protection and beyond that if someone gains access to log into my financial websites they wouldn't be able to do much but see my transactions and perhaps transfer money to me. I practice the habit of monitoring all of my financial accounts regularly, verifying contact info such as email and any linked accounts that exist. Any change to any of my accounts sends me an email so even if I was to be comprised my regular checking of accounts and email notifications would quickly tip me off of the problem and allow me to take measures to secure the problem through changing my passwords immediately.

I highly recommend Mint.com to everyone.

Live below your means

Everyone everywhere simply states that to gain wealth all you need to do is live below your means. That is a very difficult discipline to force yourself to learn. Through my budget I was able to begin to see and understand where my money was and is going. Cutting my extra living expenditures to a limited budgeted amount was the best thing for me. I love to drink a beer every now and then in the local pub, but seeing how much I was actually spending versus how much I should have been spending was a great source for the depletion of my funds. Things like smoking, excessive dining out, and any other vices can really put a dent on your wallet or a high balance on your credit cards. I used my budget to reduce my spending and reduce my cell phone plan a large culprit to where my money was disappearing to. I canceled subscriptions I didn't need. And somehow after just spending a few months strictly following a budget I began to realize the difference between a want and a need. I had a lot of wants and not many needs. I need a cell phone, but I wanted unlimited internet and texting and other features I could easily live without and save as much as $50 per month because of it. This was definitely the start of my financial education.

Where do I start on my quest.

The first goal of my quest was to figure out what I had. I made an incredibly simple budget in notepad. I Listed every bill I have, the date it was due, and the average amount of the bill. Then I put my weekly take home pay by date and created a sort of list that showed how much I made that week and what bills were due from that weeks pay check. I made sure to start putting all leftover money into savings every week. Controlling my income and expenses in bill payments was my first self taught lesson in controlling and learning my finances. Through this I actually saw numerous ways I could reduce my means of living like removing unused features on my cell phone plan reducing my bill. I also was able to prevent spending money on things I didn't need by living by this simple budget. I also included a budget for meals and play money for say happy hour or the likes. By breaking my expenses down by week for an entire money I was able to develop a decent sum of cash pretty quickly. It was a challenge but once I began living strictly to a budget I ended up with a lot more leftover money than I though possible, and I knew that with more discipline I could continue to increase this amount of leftover money and stash it away into savings.

The beginning

I turned 27, realized that I was in a plateau standstill point in the advancement of my career. I attained my Associate degree and got a good professional job in the IT field I thought I had it made, at 20 years old I had my whole life ahead of me with big plans and dreams of getting rich and retiring well before 65. My job actually showed great means for my advancement for after a year I was promoted to an Administrative position with great responsibility. I worked hard, very hard, 60+ hour weeks telling myself that hard work pays off and was the way to attain financial success. That worked until I hit 25 and the pay raises stopped but the workload continued to expand. No matter how perfect of a job I did the only reward I achieve was the verbal appreciation of what I do, no more raises. In fact at annual reviews I was laughed at when I asked for promotion. In all fairness the market was in a steady decline and layoffs were beginning to happen slowly but surely around the country. It is now 2009 and I'm six months into my 27th year and I have realized that I'm probably going to have to work until I'm dead, and that I've have to take responsibility for my own financial future because financial success will never be in the paycheck my employer provides. I enjoy my job and because of this down and out economy that has caused so many to go unemployed I decided that I was going to make the best of what I earn. Here begins my quest to turn what little money I earn into money that hopefully will allow me to retirement as well as help me earn more throughout my lifetime.