Andy Hough

August Goals Update

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Made some progress on my goals last month.  Listed below are the goals I set at the beginning of the year and the progress I’ve made on them.

  1. Don’t acquire any debt other than student loan debt.  I’ve met this goal but I have accumulated more student loan debt.
  2. Lose 20 pounds.  I haven’t done well on this one.  Earlier in the year I gained eight pounds and didn’t get back to my starting weight until July.  I only lost one pound in August.  I’ll have to lose nineteen pounds in the last four months of the year to meet this goal.
  3. Improve my blog.  This is somewhat subjective but I feel I’ve met this goal.  My readership has greatly increased since the beginning of the year.  Last month I installed a new theme and readership went up.  There will always be room to improve more though.

Overall, I’m doing okay on my goals but I need to keep working on them to avoid any setbacks.

How Much Should You Save for Retirement?

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The standard used to be 10-15% of your income should be saved for retirement. That still might be a reasonable standard if you start early enough, your investments perform well, and you’re confident that Social Security will provide a healthy boost to your retirement income.  There isn’t really a one size fits all standard on how much you should save for retirement. Many different factors come in to play such as how early you start saving, how much you plan on spending in retirement, what returns you’ll get on your investment, how long you’ll be retired, and so on.  Since I didn’t start saving until age 39 and don’t have much confidence that I’ll receive a full benefit from Social Security I need to save more than 10-15% of my income.

I made approximately $12,000 last year and invested $4,000 in my Roth IRA.  That is a savings percentage of 33% of my income.  That isn’t bad but I still need to increase my income or savings percentage or both if I want to retire.  I’d like to retire before I’m 50.  I’ll be 41 this month which only gives me nine years to save enough money.  That makes my goal a longshot but I have some ideas how to make it more probable that I’ll share in another post.  My total invested in my IRA will most likely be smaller this year but my savings percentage will likely be about the same.

I see some people that save much larger percentages of their income.  These are usually people with much larger incomes than me.  I’ve developed another way of measuring percentage of income saved that levels the playing field somewhat between large and modest incomes.  I look at what percentage of income above the federal poverty level was saved for retirement.  The federal poverty level for 2008 for one person is $10,400.  My income was $12,000 and I saved $4,000 so my savings percentage was over 100% of my income above the federal poverty level.  I don’t think there are a lot of people matching that although I’m sure there are some.

In summary how much you should save depends on your circumstances.  In my opinion you should save at least 20% of your income and if you want to retire early you should save much more than that.

I Made A Stupid Money Mistake

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I was rather surprised recently when I received an email stating that I still owed $1,000 in tuition.  I didn’t pay my tuition for my Summer class because I expected it to be paid from my Fall financial aid. When the surplus from my Fall financial aid was deposited in my bank account I noticed it was less than I was expecting and assumed that my previous balance had been paid from the surplus.  That assumption was a big mistake.  If I had even done a ballpark estimate in my head I would have figured out that was wrong.

For some reason my school applied about $500 from the surplus to my previous balance but left a remaining balance of about $1000.  I’m now going to have to pay that out of the surplus amount.  This is kind of a pain since the school only accepts checks or cash for payment and I don’t have checks.  I’m not actually out any money because I owed the money either way.  I still feel like I’m poorer though.  This should serve as a reminder to me to not be so lazy when accounting for my student loan money.  I keep track of every penny I spend outside of financial aid so I should be more diligent when tracking my financial aid as well.

August Income- $1389.60

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Here is a breakdown of my income for August.

Job

$864.82

Online Income

$355.50

Bank/Referral Bonuses

$135

Interest

$16.88

Surveys/Selling Stuff

$17.40

Total

$1389.60

My income was decent considering I only worked for about half the month.  M y online income should be up significantly next month.  I use the cash method of accounting, I had a good amount of affiliate sales in August that won’t be counted until I receive them this month.  It will be difficult to make up the $864 in job income though.  I’m working on some ways to increase my online income but it will probably be a couple months before I see any results.