Saving for a Vacation: Ski Edition

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Saving for a Vacation: Ski Edition

We are currently in the heart of wintertime.  January and February are the coldest months in the United States.  While many people despise cold weather, many can agree that the snow which comes with it can be a nice compliment.  Although summertime seems to be the time when most families vacation, a ski trip during winter allows some families to break the mold.  Saving for a vacation is only half the battle.  While having the available funds to do something enjoyable is important, finding a good deal is also just as important.  I recently planned a ski vacation and will share my six tips on how I saved and budgeted for the vacation.

Saving for a Vacation Tip 1:

If you are like me and enjoy traveling with family and friends, then it is important to have a “Travel” category in your budget.  Setting aside $100 or $200 every month for travel allows the funds to add up and allows you to have a couple enjoyable vacations every year.

Saving for a Vacation Tip 2:

Vacationing for many people means eating out every meal, which can get very expensive.  Packing snacks ahead of time and a quick trip to the grocery store when you arrive can help limit your food costs.

Saving for a Vacation Tip 3:

Plan for transportation ahead of time.  Booking a rental car before you arrive to the airport is often cheaper than waiting until you arrive at the destination to get one.  Kayak.com is a great place to search for the best rental car rates.

Saving for a Vacation Tip 4:

If flying to a destination, use Google Flights to search for the best rates.  Google Flights allows you to search many airlines at once and see the cheapest rates for the best dates.

Saving for a Vacation Tip 5:

When booking a ski vacation, book your lift tickets and ski or snowboard rentals online.  Keystone Resort in Colorado offers online reservations to early bookers for a 20% discount.  Additionally, you can rent your equipment cheaper online ahead of time as well.  By booking my equipment through Christy Sports I was able to save an additional 20% versus the walk-in rate.

Saving for a Vacation Tip 6:

Lodging tends to be one of the more expensive parts of any vacation.  Last year when I traveled to Hawaii, a night at a resort was close to $600 per night; however, a couple friends and myself split a three bedroom Airbnb for less than $150 per night.  Exploring your lodging options can help greatly reduce the cost of any vacation.

As you can see, saving for a vacation is a two-fold strategy.  You first want to make sure you have the available funds.  This is done by creating money in your budget.  Secondly, you want to make sure you find the best deals out there.  I have found that planning for a vacation ahead of time is one of the easiest ways to save on your trip.  Meshing both of these aspects together can help create an enjoyable, budget friendly trip for all.

Take 5 (Minutes)

I’m going to need you to Take 5.

And no, not the candy bar.  We all have 5 minutes a day that we can spare.  This 5 minutes revolves around budgeting and monitoring your spending habits.

Budgeting is a simple process when you have the right tools.  That is why I give you my free Excel spreadsheet so you can create your own budget.

I am now beginning my third year of budgeting, and I have found great enjoyment in knowing where all of my income goes on a monthly basis.  It could be because I like number a lot, but mainly because I know I’m setting myself up for financial success.

Kathleen discusses in her article how a simple 5 minute action every day keep hers on her budgeting towards her goals.  Honestly, I don’t even think it takes the full five minutes, but they don’t make a candy bar called Take 2.  Check out her article and see just how simple it is to get your money habits off to a great start in the new year.

http://finance.yahoo.com/news/habit-takes-less-5-minutes-160000540.html

 

Budget Smart, Invest Wise

 

 

25 Ways to Improve Your 2016 Finances

new year

A new year is fast approaching.  While many are finishing up their holiday shopping and setting their New Year’s Resolutions, now is also the best time to lay out your financial framework for 2016.

As is always the case with every new year, it is time to prepare a new budget.  Getting your budget off to the right start is the best way to help your financial situation in the new year.  Go to the Monthly Budget page on my website and download an Excel version for yourself.

Create your monthly budget for the new year, using your best guess estimates for various income and expense categories.  Remember that it doesn’t have to be perfect, and you can always change it as the year goes on.

After you have set up your monthly budget, I highly suggest you check out Kimberly Palmer’s article that was shared on Yahoo Finance.  I have provided the link below:

http://finance.yahoo.com/news/25-ways-improve-finances-2016-154142827.html#

Look at some of the suggestions outlined and see where you can tailor your budget to focus on paying down high interest debt, or finding spare money to invest for your future.  You might not be able to relate to or benefit from all 25, but find at least three that you can implement into your 2016 budget.

 

Budget Smart, Invest Wise

 

How Much Should I Save?

The short answer?  As much as you can afford.

Various articles will try to tell you what you need to save for retirement based on your age.  The conclusion of each chart though?  The earlier you can start off saving, the better.

Forbes has the following chart:

What this chart tells us is that the earlier you start saving, the less percentage of your income will be required to save in order to have a healthy retirement.  For someone who is 25 years old, saving roughly 15% of one’s income all the way up to retirement will produce the same level of retirement living as someone who starts saving when they are 40, but has to save 43% of his or her income.  In a nutshell, the earlier you start saving, the better.

Do I practice what I preach?  ABSOLUTELY!

I save 15% of my pretax income towards my retirement.  I don’t stop there.  I also save an additional 40% of my after tax income towards my future.  This includes a company sponsored 401k, a Roth IRA, and a taxable brokerage account.  I am still able to enjoy the money I make now through entertainment, going out to eat and travelling, but I have placed a high emphasis on making sure I have an excellent post-work life.

Don’t feel like you have to save every extra penny.  Find ways where you can maximize your savings and have a wonderful quality of life.

Make sure you are taking advantage of a company 401k plan if you have the opportunity.

Open a Roth IRA if you haven’t already.  I’m serious about this one!!!

Save first, spend later.

Budget Smart, Invest Wise

 

Student Loans: Grace Period, Waste Period

I spoke with my sister who just recently graduated with student loan debt.  She asked me, “How do I start paying back my loans?”  I told her, I don’t know.

If you have recently graduated from college then chance are you have student loans to pay back.  There is student loan exiting counselling you must go through and then it seems like you’re all finished.

This is exactly what I did.  After I graduated I went through loan counselling sometime during the late summer of 2012.  And then… Nothing.  I don’t even believe I received an email until almost six months later when it was time to start paying back my loans.  My grace period was coming to an end.

If you take out a student loan through your college or university you will most likely have a grace period of six months.  This is so you can have time to “Get your finances in order”.  I assume these loan company figure if you were this easy to get into debt it was the least they could do.

The bad part about this “Grace Period” is that interest is accruing during the six months you aren’t paying back your loans.  The loan companies try their best to hide this from you and make it as difficult as possible to figure out how to pay back your loans before the period is over.

Step 1: Log on to https://studentaid.ed.gov/sa/?login=true and find out who your student loan provider is.

Step 2: Create an online account with your provider(s) and set up your account information.

Step 3: Begin paying back your loans before the grace period ends to limit the amount of interest you will pay over the life of the loan.

 

Budget Smart, Invest Wise

The Annual Raise

Do you get an annual raise from your employer?

If yes, listen up.  There is a way to allow that 2, 3 or 4% your employer gives you to add enormous amounts of wealth to your pocket.

There is a thing called lifestyle inflation which ultimately means the more you make the more you spend.  It is human nature for us to increase our standard of living as our income goes up.  For instance, when I was in college, I rarely went out for a nice sit down meal.  Now, I go a few times a month.  Lifestyle inflation is bound to happen to a certain degree.  You make more money, you start a family.  You start a family, you need a bigger house.  It isn’t a perfect cause and effect relationship but you get the gist.

So what are you doing with your annual raise this year?  If you are like most employees then you get a tiny piece of satisfaction out of seeing a slight bump in your paycheck.  Not like an extra $30, $50 or $70 a paycheck makes a huge difference, but it can if it is put in the right place.

Let’s say you are the recipient of a 3% annual raise from your employer.  Instead of letting the raise go straight into your paycheck take 2% of that raise and increase your 401k contribution by 2%.  Then let the 1% add a little more to your paycheck.  Now on an individual with a $50,000 a year salary, increasing your 401k contribution by 2% is only $1000.  However, if you let that money compound and you continue to put your raise into your 401k each year, then over time it can add up to thousands if not hundreds of thousands of dollars.

Nobody ever looks back and says “I saved too much money.”  So give it a shot, and let the savings pile up.

Budget Smart, Invest Wise

Thinking Outside the Retirement Box

Having a company 401k is a beautiful thing.  A company match is the biggest way to get a free return on your retirement savings.  But don’t let a company sponsored retirement plan be the end all be all to your future savings.  When it comes to your financial future, I’m a big believer in having multiple sources.  IRA’s, taxable brokerage accounts, real estate.  There are many ways you can put your money to work.

Working at a company for 40 years and having a retirement plan coupled with social security might lead to a decent retirement future.  Decent is not what I’m seeking and neither should you.  You need your company retirement savings plan, but you also need an IRA, and other investments to fund an excellent life during your golden years.

The following article presents additional ways to save for those future years.  It is possible to save too little, but you can never save too much.  Check out ways to expand your retirement portfolio and ensure you make the choices now for a great financial future.

http://finance.yahoo.com/news/ve-maxed-401-k-where-205207623.html

Budget Smart, Invest Wise

 

 

3 Things to do Every Payday

Friday’s are paydays for a lot of people.  The influx of cash in your hand in the form of a check or the increase in your online bank account is exciting.  Some follow proper protocol on payday.  They take the necessary financial steps to ensure their financial well-being.  There are three things you should focus on each payday to ensure your financial life is on the right track.

1) Pay Bills:  

Each time you get paid, whether it’s every week, two weeks or monthly you need to meet your liabilities.  More specifically you need to pay any bills that are due before you get paid again.  This could mean rent, a credit card statement or a car payment.  Avoiding these payments will be a costly mistake to your credit score and will ultimately cost you more money in the long run with accrued interest.

2) Automatically Invest:

Each time you receive payment from your employer you should be investing in your financial future.  This could be in the form of a 401k contribution with an employer match.  It also could be an automatic withdrawal from your bank account every pay period.  Brokerage firms have made it easier than ever to make investing a seamless process for the investor.

3) Have an Indulgence:

After you have met the first two objectives you can move on to this third.  Whether it is a nice dinner, a night out with friends or a small purchase, enjoy the fruits of your labor.  Of course you should still make sure this indulgence fits into your monthly budget.  Still a nice reward.

So there you have it, three things that you should do each time you get paid.  These steps allow you to not only take care of your financial future, but also ensure you will enjoy the journey along the way.

Budget Smart, Invest Wise

 

Video Series: How to Invest

We’ve heard it time and time again from arguably the best investor of all time.  Warren Buffett has simple advice on how Americans should invest.  You can try to beat the market, and some of your investments might do just that.  Most, probably not.  Heed Warren’s advice.

From one king (of investing) to another king (of the court) the way to build wealth is simple.  Own America, invest in a low-cost index fund, invest regularly, and give it time.

Budget Smart, Invest Wise

Video Series: Eye Opening World of Personal Finance

Today’s video is one that is almost two years old; however, the facts provided and insights suggested are timeless.  I honestly believe that the majority of people who follow my blog are in a better financial position than 90% of people throughout the world.  It is mind boggling to see how some do struggle.  We get caught up in a spend spend spend trend that we forget how important it is to save save save.  Maybe you know someone who isn’t in as good of a financial position as yourself.  Help teach them responsible personal finance and don’t let him or her become another statistic.

Budget Smart, Invest Wise