Emily's budget

[emilysbudget]

"Stop your identity crisis and get some identity capital" 

"Exploration that's not supposed to count is not exploration, it's procrastination."

[emilysbudget]

The plan in 3 phases

The plan

Phase 1:

1) Make a budget

2) Build emergency fund

3) Max out matching retirement programs

4) Pay all your loan minimums monthly, then allocate extra $ to the highest interest loan (or the smallest one, if interest rates are the same)

5) Investigate loan deferment options if you have multiple loans to avoid paying interest in the short run. Also, see if you're eligible for any loan forgiveness

Phase 2:

1) Start a Roth IRA!

2) Make individual accounts in savings for different savings goals

3) Build emergency fund to 6+ months of expenses

Phase 3:

1) Max out all retirement plans (I'm not even here yet...)

2) Save up to build a house in Mell's backyard

3) Have a baby and designate Mell as the cool aunt.

[emilysbudget]

Dollar-cost averaging. This article talks about it in terms of lump sums, but the principals are the same no matter where the money is coming from.

"Here's how it works: Every month, invest the same dollar amount in a stock or mutual fund. You can use the strategy either with a starting lump sum of cash or as you receive income from paychecks or other sources.

The strategy is appealing for a couple of reasons. First, the strategy naturally takes advantage of changing prices. When share prices are low, your investment buys more shares on the cheap. Conversely, your fixed dollar amount buys fewer shares when their price is higher. On the whole, this prevents you from buying high -- and if share prices bounce up and down a lot, you can end up with more shares this way than you would by making a bigger up-front purchase.

Second, dollar-cost averaging makes nervous investors feel more comfortable. If you've kept a lot of money in cash and then decide to get it all back into the market at one fell swoop at what proves to be exactly the wrong time, you may panic and sell everything after a drop. But if you invest a bit at a time, then you're more likely to weather the inevitable storms or even see them as buying opportunities."

[emilysbudget]

The Psychology of Automation: Building a Bulletproof Personal-Finance System

I love this, and I'm a huge believer. Send as much as you can toward automatically going into savings/retirement from the start and then you won't "miss" it. Everytime you have to touch your budget, you're more likely to fuck it up.

[emilysbudget]

Emergency funds are hard to save up but make you feel so good once you do! The (eventual) goal is to get to 6 months of expenses, but having $1000 at first is enough to not ruin your life if your car needs repairs or your computer dies.

[emilysbudget]

Interesting student loan payoff tool

Basically indicates that interest rate rules for consolidation have changed and you're usually better off NOT consolidating

Also, an interesting tool for tracking/projecting loan payoff

[emilysbudget]

Roth IRA's and how to get started

Roth IRA's are a great way to save for retirement when you're starting out. The basics:

1) You can only invest $5000 a year

2) Like all retirement accounts, pick one with a low maintenance fee. Vanguard or T Rowe Price are the best

3) Low maintenance index funds are the best--the target retirement index funds are great

[emilysbudget]

If you are trying to decide which investing strategy to use after having learned a bunch of new financial lingo, you might be thrilled to come across the buy-and-hold strategy. What you see is what you get! The buy-and-hold investing strategy is simple:

You purchase stocks and hold them for a long time, decades even, until you retire or even longer.

[emilysbudget]

[emilysbudget]

Find out how to get your federal student loans forgiven or canceled due to your service as a teacher.

"If you teach full-time for five complete and consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families, and meet other qualifications, you may be eligible for forgiveness of up to a combined total of $17,500"

[emilysbudget]

Stafford Loan Interest Rates Information

Current Stafford loan interest rates

Subsidized: 3.4%

Unsubsidized: 6.8%

[emilysbudget]

The debt snowball technique

Dave Ramsey's debt snowball plan technique:

1) Build a $1000 emergency fund

2) Pay minimum payments on all debts, then push any extra toward the lowest debt so you can close them out, one at a time.