Financial Journey
(featured column)
A
New Year, A Fresh Start
by
Karen Kuebler
I am always
invigorated at the beginning of each New Year to review, reflect, learn from my
mistakes, and map the coming year’s financial plan. I thought I would
share my process and some of the things I do, hoping that you might find some of
these ideas helpful. Although it’s exciting to me, you might have
the response – “Gee, she’s a lot of fun to spend New Year’s Day with!”
More...
I’ll have to
backtrack before New Year’s Day, because another one of my favorite days is
December 26th. I *really* scored this year checking all of the half price
sales! Our Christmas list consists of approximately 30 people. We
have 12 grandchildren alone and are now expecting our first great grandchild!
I created my birthday list for 2006, Christmas list for 2006, and birthday list
for 2007. Instead of bringing all the gifts home and putting them in the
cabinet, I’ve spent the last 2 weeks organizing and wrapping the gifts I’ve
purchased. We are storing them in boxes under the house. I have
about 75% of my gifts ready for 2006 birthdays and Christmas, plus they are
already wrapped. I know this might sound over the top, but it’s a matter
of wrap them now, or wrap them later!
By keeping the lists, I can see who is left that I need to find gifts for or
make gifts.. I also have several items in my gift cabinet, and might not
need to purchase very many more. I have some ideas for gifts I want to
make and I enjoy doing that throughout the year as a hobby. I also shop
garage sales all year long and find great purchases to stock my gift cabinet.
I spent a lot of time on my process of how I buy and organize gifts because I
found this to take up a huge portion of our discretionary budget in the past,
and I had to find a way to cut costs in this area significantly.
Unfortunately, our family is not one to want to draw names – I’d be all for
it – but the rest like the individualized gifts, even if they aren’t
expensive. I’ve been able to ratchet down expectations over the years.
I think that is one thing about getting older that I really like. I’ve
learned not to seek approval of others as much with my decisions!
Now, fast forward to New Year’s Day. I always create our new budget for
the year on New Year’s Day. I use Quicken,
but there are many good software programs available. It is a calming and
relaxing thing for me to do and I really enjoy it. This gives me the opportunity
to examine last year’s budget and actual spending and evaluate categories
where we exceeded plan. If the reasons for exceeding the plan made sense
then I’m okay with that. If I felt that we spent carelessly, it helps to
target correct for the coming year.
One area where we exceeded our budget was gasoline and heating with natural gas.
Of course, that was self-explanatory. I increased the budget for
these areas in 2006. Other areas where we exceeded our budget were
typically because I had set the budget too low. I actually had set our
grocery budget for $100 per month, and we spent $150 per month. This year
I adjusted that to $130 a month (a nice compromise.) Most people don’t
understand how we exist on that amount for groceries, but there are only two of
us and we are healthy and well fed!
After completing a month by month budget, we review it to make sure it seems
reasonable and doable. We like to play a game of beating the budget
each month and seeing how much extra we can tuck away into savings. Even
though we are retired, I continue to have a category in our budget for savings
and it is automatically withdrawn each month. This keeps our
contingency/emergency account building over the year. When you are
retired, you still have those unplanned expenses come up that you need a
contingency account to access.
Next, I create a page to track our assets for the coming year. I set it up
to evaluate our assets at the end of each two month period. The tracking
form consists of all of our investments and savings plans, stocks, CD’s, and
various accounts. Since we live off of our savings and investments, I want
to keep a close eye on the total value of these throughout the year to make sure
we aren’t losing money. My goal is to increase our principle over the
years.
In addition to tracking our accounts, this form includes a goal for the end of
the year. I have a five year and ten year plan to continue to grow our
asset base. Part of this would be done through growing investments,
increases in the equity market, interest on CD’s, and so on.
The second way to increase our savings and investments is by finding resourceful
ways to make money while we are retired. I keep a list of creative
brainstorming ideas of ways to make money, and continue to add to that list.
A few examples include selling on Ebay, teaching others to sell on Ebay, and
giving computer lessons. These are just a few of the ways that I have been
able to add to our savings during this past year.
At this point in my life, I don’t consider myself “retired.” I
consider myself financially independent so that I can choose the ways I want to
spend my time. I do spend some time in money making endeavors, but I can
choose to do the things I love to do and not be tied to something I don’t
enjoy.
It is a financial journey – it is a journey where I chart my course, track
where I am to make sure I am staying on course, and set target goals to journey
toward. The journey will never end! The target goals will continue
to change, and the paths may vary – but that is what makes it adventurous,
fun, and exciting for me.
I hope that each
one of you will enjoy your financial journey throughout this year!
* * *
Copyright
© 2006 by Karen Kuebler. All rights reserved.
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