Monday, November 21, 2011

Money Monday: Prepare to Win


Happy Monday All!

I trust you're having a great week.

This week has been interesting, with some highs and some lows. First the highs...

Last week, I shared about being given a Kohl's $10 off card in addition to $20 another person gave me to use with that card.

This week, I went shopping with my mom to use her 20% off savings pass to see if I could find a sweater (like the person who gave me the $ suggested) and to see if I could perhaps find some new jeans -- my favorite pair were on their last leg...literally.

I'm pleased to say that between a great sale, a clearance rack, the 20% off coupon, the $10 off card and a credit that my mom had on a gift card from the store, I was able to get a pair of jeans and a very cute sweater for $16!!!! I paid with the $20 I was given and then gave the rest to my mom to go towards the credit she "donated" to the cause.

Now...I'm a bargain shopper, but even that kind of a deal boggles my mind.

Couple that with more Starbucks amazingness this week (I swear that I am not able to spend money at Starbucks lately!), I have had a great lesson in continuing to trust God for needs AND wants!

My Starbucks story continues from last week's post where I mentioned that I did not fund my usual $15 on my registered card because, honestly, we just didn't have the money. After finding that $5 gift card last week and applying it, I was given a belated birthday gift on Tuesday -- a $15 Starbucks card!

And if that wasn't amazing enough, when I actually went to use it when I met a friend for coffee last week, she wouldn't allow me to pay! And when I went up an hour later to get a refill on the regular brewed coffee for the both of us, my gold card brought the $1 charge down to $0!!!!  Again...I paid nothing! The following day, I was back to take advantage of  the Buy One, Get One free event they had so I could buy one and then take my dad a free coffee, I was given a receipt for a FREE coffee after completing a brief survey.

So, technically, after I redeem that free drink offer, I won't have spent ANY money on Starbucks out of my own pocket this month, yet I continue to be able to enjoy a treat every now and then.

Pretty amazing.

I shared some of this last night at our Financial Peace University class -- about how I feel like after I repented of my bad spending habits, I've seen God make a way like I haven't in years -- all because we're solely relying upon Him for everything.

And now for the bad...I have to confess not being ready to cut up our credit cards. It's tough when you can use them for some sort of reward (fuel, cash, etc, discounts/savings) and I have to admit to falling off the wagon again this week --- more out of a panic than actual need to use them. The amount the register rang up to was more than I had calculated and I have to admit not checking my Inzolo account for the envelope balance, so I did what I have always done when that happens.

I'm not proud of it. I paid it off when I got home, but I see how easy it is to fall into that trap again (and yes, I forgot about that emergency fund again!), so I think we are actually going to have to make that leap to cutting up the cards -- honestly, it is a bit difficult. Who would have thought? My goal is to have cut them up by the end of the class and I'd better get on that, because we only have 4 more left!

Speaking of...last night's class was called, "From Fruition to Tuition: Planning for Retirement and College."

It was really interesting, albeit hard to hear in some senses because it's a few years removed for us while we work hard to pay down debt. This lesson deals with Baby Step 4 (Investing 15% of your household income into Roth IRAs and pre-tax retirement plans) and Baby Step 5 (Save for your children's college using tax-favored plans).

In the first baby step, after you have paid off all your debt -- save your mortgage -- and you have 3-6 months living expenses in the bank, then you need to focus your attention on preparing for your future. Ramsey talks about all the usual suspects of "qualified plans" (401(k), 403(b), etc) and how they work. However, the bottom line is that you need to do at least 15% to live comfortably in your retirement years. What is neat is that he walks you through exactly how that looks and the formula by which you can figure out exactly what amount you need to put away and how.



Although it seems daunting (and it can be), it is actually pretty freeing to see it all there in black and white. Knowing what the game plan should be to achieve the lifestyle you want in your later years is just good sense. And we all know how well hiding with our head stuck in the sand works out.

The other Baby Step (#5) talks about saving for your children's college using tax-favored plans. (This is AFTER you have taken care of funding your own retirement needs.)

I know that this is a topic of discussion with my friend group. Those who didn't get any help from their parents tend to be of the mindset that their kids will need to go it alone. Those of us who did receive help are more of the mindset to want to help our children -- at least in some way -- to able to graduate debt-free or fairly close.

My personal opinion is that higher education is getting more and more outrageously expensive. However, the benefits still remain. College graduates generally make more money.

Ramsey walked us through the different options and his suggested plan -- the Education Savings Account (ESA). He also shared with us three "nevers" of college saving.

1. Never save for college using insurance
2. Never save for college using savings bonds (they only earn 5-6%)
3. Never save for college using pre-paid college tuition (only earns 7% inflation rate).

There is also a handy spreadsheet in our workbook that shows us how to calculate how much we should save.


As with everyone in life that's worth working towards (health, weight-loss, spiritual maturity, etc), it takes stamina and will-power to stay the course -- especially when that course gets rocky.

I'll close this week with this awesome quote by Bobby Knight:

                   "Most people have the will to win, few have the will to prepare to win."

Are you willing to prepare to win?

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To read more about our journey to financial peace, read related posts here:
http://www.mosaicmomma.net/p/finding-financial-peace.html

For more info on Financial Peace, visit:
http://www.daveramsey.com/fpu/preview/


For info on Inzolo -- an online and mobile "envelope system," tool, visit:
www.inzolo.com

For more info on The Blessed Life, visit:
http://theblessedlife.com/

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