Maximizing my 401K

It has been a lot of work and a long time coming but at my companies open election period every 6 months I have been increasing the amount deducted from my paycheck for my 401k. I am now 28 years old and have been contributing to my 401k since I was 21 and I regret not doing this when I first was able to contribute to my retirement account.

Although back then maximizing would have made it impossible to live, however, had I put at least the full amount my employer matched it would have been better than the measly 2% I started out with.

On July 1, 2010 I will make the final step from my current 10% to the maximum allowed which is 15%. This is a large jump and will reduce my take home pay by quite a bit, however, I have spent the past 12 months reducing my frivolous spending, adhering to a simple budget, and learning to live on less.

Looking back last year was the first year I began maximizing my Roth IRA, but if I could do it all over again beginning say at 25, when I started to make enough money to live on and contribute to retirement, I would have maximized my 401k first because of the huge tax advantages of reducing my adjusted gross income with pretax withdrawals as well as my companies matching. Although I regret not doing this earlier, live and learn and pass it on, I feel it is better late than never. I know lots of people who have 10 years on me who haven't yet maximized their retirement savings. My recommendation for everyone working is to take care of yourself first by paying yourself first. It can automatically happen with a 401k provided from your employer so why not invest the most towards a happy and perhaps wealthy retirement.

I have mentioned this tool before in previous posts however I will recommend it again as it is quite accurate as predicting payroll adjustments and how they affect take home pay.

How Will Payroll Adjustments Affect my Take Home Pay

Betting on the Bad Guys

Here is an article I read that was posted earlier this month I figure I would share. To me it makes a good bit of sense and provides a bit of humor as you read. It is really nothing more than food for thought, but it makes a great point of considering the companies you hate the most as good investments.

Always Bet on the Bad Guys.

The creator of Dilbert easily has me convinced and checking on how much I could have made had I invested in a few of the companies I hate back when I began to hate them. The hatred doesn't have to be blind hate, it could be jealousy of the addiction to their products or success with limited ethics or morals. Either way investing in companies you like is apparently riskier statistically according to this article than investing in companies you have no strong emotional tie. Think about it.

Increasing my Financial Knowledge with Personal Fincance Books

Here is a simple list of books I have read in order to guide my thought process on investing, retirement, and personal finances:

Grow Your Money!: 101 Easy Tips to Plan, Save, and Invest

The Ultimate Dividend Playbook: Income, Insight and Independence for Today's Investor

Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and the Middle Class Do Not!

The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich

The Bogleheads' Guide to Investing

The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market

The Complete Personal Finance Handbook: A Step-by-Step Instructions to Take Control of Your Financial Future

Your Money Ratios: 8 Simple Tools for Financial Security


The list will continue to grow as I seek personal education and knowledge to help me take charge of my financial future.

Improving Health

What good is investing and saving money for the future if in the future it is all lost to medical bills and health expenses, or worse, not living long enough to enjoy it on account of poor health. I am an overweight desk job working individual and on top of that attending college after work eats up the rest of my free time outside of work. Exercise and eating properly is a luxury that I don't have the time for. I usually have coffee for breakfast and fast food for lunch, and by the time I get home at the end of the day even though I try to eat healthy for dinner I snack on junk food for the rest of the evening on account that I didn't eat enough during the day. This repetitive problem has left me overweight and drastically out of shape. As I have disciplined myself to save more and improve my personal finances, I have now decided that I need to improve my health by trying to loose some weight. I am still an incredibly healthy person who never gets sick, however, as the years go by I get more and more out of shape I fear that my blessings of good health are going to run out. Loosing weight in 2010 is going to become a higher priority for me.

Due to my problem with a lack of time how I loose weight creates a challenge. I need to try to fit in a proper breakfast, lunch, and dinner into my life without over eating. In the past I've tried various means to try to manage my time properly to include exercise and better eating habits with no success. At this point I have decided that I am going to use a simple managed system that will allow me to follow a weight loss program without thinking. Seeing how eating fast food for lunch alone costs me about $10 a day during the 5 day work week I have decided that I to try the Nutrisystem Flex 5 day program for a month at a daily cost of $9 per day for three meals. I am going to see if in 30 days I can loose any weight on the program while forcing myself to eat healthily including breakfast, lunch, and dinner.

Trying the Nutrisystem program will actually save me money every day and hopefully help me eat healthier by cutting out the large amounts of fast food that I eat. If I have any success during the first three weeks on Nutrisystem I will allow the program to automatically renew for a discount making the cost per day even less. Loosing weight would be great and the increased savings can allow me to increase the amount of money that I am saving.

Improving My Quest for Wealth early in 2010

"Spend less than you earn" a timeless statement that has been proven to be the simple way to get rich and attain wealth over time. But thinking of spending less than you earn means controls have to be put in place in order to reduce your spending. Although I did a good job of this in 2009 it proved to require a lot of focus and effort. I prefer to work smart, not hard. An easier way I am going to follow the lesson of spending less than I earn is to save a piece of every dollar I make. Out of all of my income I will take 15% of all income to savings and investments. This 15% does not include the automatic percentage deduction of my pretax work provided investment accounts such as my 401k and HSA. If I can save 15% of my take home income on top of my 401k retirement account and my Health Savings Account I think I will be well on my way to thoughtlessly spending less than I earn. After having saved 15% of what I earn I plan to enjoy the rest on enjoying a couple of beers while going out or buying a new gadget I want.

What I Think of Budgets

Everyone wants to get the most of their money, however, living by a strict budget can become a tedious and boring task that proves hard to commit to. The problem is in order to attain wealth it is a must that I seriously commit to my finances. Most budgets are too time consuming for me to upkeep and maintain. So for 2010 here is my solution to keeping up with your expenses in a budget like way and using the proper tools to keep track of my finances as if I was maintaining a proper budget spreadsheet in excel or some other program. I simply want the results of hardcore budgeting but in a much simpler way.

First, I keep track of your expenses by using Mint.com which is one of the personal finance tools mentioned in my blog: Personal Finance Tools and Informative Sites. Using a personal finance tracking site I am able to keep track of my expenses to the penny which is a necessary task when attaining wealth. Mint.com actually creates a very nice budget for me based on my spending history which is fantastic, but isn't necessarily a budget replacement. Second, instead of standard boring and tedious budgeting I have simplified the process. Instead of trying to contain my spending and money usage with a standard budget, instead I track every paycheck and every bill. I start with my weekly income from my paycheck and then list all of the bills that must be paid on that paycheck. I know the exact dates my bills are due and I know the exact dates that I am going to be paid and because I am a salary employee I know exactly how much my paycheck will be every week. I know how much spending money I will have available using simple subtraction of all my bills being paid from each paycheck, I also include in my bills my automatic payments to myself every week into various savings and investing accounts. From the leftover balance I treat it as if that is what I got paid and I splurge it on whatever I want. If I have any leftover at the end of the week it goes into next weeks play money adding up for extra frivolous spending that happens from time to time. I find it easier to know how much I will have available for spending weeks in advance. I find it much more satisfying to let this leftover cash burn a hole in my pocket when I want and not having to worry about sticking to complex budget or not saving enough. I simply don't care what I spend my money on, no restrictions to any areas of my spending other than the total amount I have available to spend. Technically this may still be a budget, but it just seems simpler and less time consuming to me.

My First Semester Back in College After 7 Years

One word describes my acceptance of a challenge I made to my self to go back to school: Success. My plan to attain my a Bachelors of Applied Arts and Sciences in order to further my education, knowledge, and improve myself is well in progress. I have officially completed my first semester back in school and will soon begin my next semester and the feeling of success from hard work and determination is great. I used to hate school when I was younger, but now I actually enjoy the challenge and knowledge I am receiving. Although getting my Bachelors will probably not warrant any increase in pay or promotion with my current employer it will improve my work and overall mood towards life. Succeeding at completing my goals provides me with a great feeling inside, and to me providing better work to my employer and feeling more successful overall is worth the cost of college. During the 2001 and 2002 recession I chose to enter the work force after completing an Associates in my field of interest instead of following through to complete my Bachelors. I did this on account of I had already attained a professional job in the downed market where others were being laid off and struggling to find work. I am now pushing 10 years of professional experience with an Associates Degree related to my field of employment, and I am now pushing to complete a General Bachelors which I feel will allow me to study a broader field of subjects and avoid the focused subject path that a specified Major and my Technical Degree offer. Instead of specializing I want to broaden my skill set to open up future possibilities that could benefit from my growing experience and my soon to be had proper education. I was happy with my Associates until the recession of 2008 started and I began to see the lay offs in my field. I saw people suffer on both sides of the education/experience spectrum unemployed for over a year trying to find work. I witnessed employers lay off those that I know with minimal education and lots of experience as well as those with minimal experience but lots of education. I don't want to experience that problem in the next recession especially if it doesn't happen until I'm much older and more reliant on steady income. The completion of my Bachelors will greatly increase my marketability in any possible future downed markets where employers want the most bang for their buck out of every employee.

Boosting my IRA's Growth with Monthly Dividend Stocks

In my constant drive to educate myself in every way possible, I have come across a plethora of information about investing in dividend paying stocks and why I should. From the information I have learned I started researching the idea of monthly dividend stocks. I own various companies that pay dividends, but I have never considered monthly dividends before. After some research I have decided to give monthly dividends a try in my IRA. Hopefully the monthly dividend payments reinvested into the stock will jump start my IRA's growth through reinvestment. My plan is to choose two monthly dividend stocks/funds that I will make use of for long term investing. The obvious choice mentioned in every book, and various blogs and dividend writings on the web mention The Monthly Dividend Company or Realty Income Corp I am not a financial adviser and this is not investing advice for anyone. This is only what I am doing. I have made the personal choice to invest into this company and another closed ended fund that pays monthly dividends and has a good dividend payment history as well. I will reinvest every single monthly dividend payment back into the stocks of these companies as well as continue to buy into these companies $100 at a time until I have accumulate $1000 into each stock/fund. After I reach this value then I will decide to continue investing or come up with a new investment plan. The stock market and investing is new to me and I feel that with continued practice, research, and discipline to stick to plans will greatly benefit me in the long run and help me build wealth over the long term. On a side note every dividend I receive from any stock or fund I own is reinvested in the stock for free with Sharebuilder.com.

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.