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