New Year’s Resolutions: eight month check up

Success On Dartboard Showing Accomplished ProgressKJ: We’ve written about our goals a lot this year, and part of what we wanted to do was build accountability around the goals we set. With a focus on one of the main things that rich people do differently – which is not only setting goals but keeping them at the forefront of their daily lives – we wanted to do a six month gut-check (which actually turned into an eight month gut-check) to see how we’re doing with our 2014 goals (read more about our intro post on our 2014 goals here).

    What goals did you set?
    Have you forgotten what they were, or have you accomplished what you set out for?

Here’s how we have fared for the first half of the year:

AJ’s 2014 goals:
Full disclosure, I forgot it was August, so remembering I started this year with goals seems impossible.
- Read 5 specific books. I have read two of the five books I intended to read along with 31 pages of a book I thought would be good for us to read as a couple (Kirby read it in one weekend about 2 months ago, and now I’m a slacker). And I’ve read probably 65 mindless books given my Nook app downloads. I bought the two other books I’m supposed to read in February, so I should probably just get on that.
- Learn to knit. I am resolved to stop making this a resolution. This is never going to happen for me.
-Learn how to bake. I’ve pretty much mastered baking, and I’ve semi-mastered gluten free baking. So long as we pretend those gluten free buttermilk biscuits never happened, this is an overall win.
-Make money money, shake money money. I’m not yet to THE goal, but I’ve made good headway. This might not happen in this calendar year but forest for the trees and all that.
- Just say no to alcohol one week per month. I THINK I’ve done pretty well about this but I’m not going to lie to you, I forgot this was a goal.
- Bring in $100 more per month. Yeah, I’m a money making machine. Check out our other post on how we made money the weird way this last month. Some months have been quite successful for this!
-Maintain my ideal weight. Kirby had a major health scare 8 days into our cleanse, so we never finished that round BUT we’re in our second month of an awesome boot camp so weight has become less of a focus in exchange for strength and overall health, so this one is for sure an A+.
-Create and maintain a garden. I think this is one of my biggest accomplishments this year. I’ve grown an incredible variety of produce that we have loved and shared. I’ve learned a lot – if your brother-in-law accidentally steps on your squash, they never come back from the dead, you can’t physically plant enough green beans to make Kirby happy, potatoes are like rabbits, sometimes you think you’re growing broccoli only to find out it’s been carrots all along, grub worms are sick and snails are suckers for snail poison.

I’m in love with gardening even though I had some failures – my strawberry plants are BEAUTIFUL, but they never produced fruit. I’m still not entirely sure where my jalapeños, sweet peppers, broccoli or tomatoes went, but whatever!

All-in, I think I’m 4 3/4 for 8, which is a-okay by this full-time-job-having, volunteer-focused girl.

KJ’s 2014 goals:
- Read 5 books. I completed reading two books so far: American Gridlock: Why the Right and Left Are Both Wrong – Commonsense 101 Solutions to the Economic Crises and The Five Love Languages. This second book is pretty fascinating. The best takeaway from this is simply a much better understanding of how different people perceive and receive love. We all have different languages, and so long as we understand that, it will go leaps and bounds to keeping open communication lines within your household.
- Professional development. This goal relates to continuing to invest in my own “human capital” (i.e. unique earning potential from the ability and skills used to generate an income). I have completed all of my required Continuing Education this year. I have three more months to go, so not too shabby. Also, I’ve continued to emphasize business development and prospecting within the community as well as finding ways to be the “guinea pig” and learn new technologies at work.
- Maintain my ideal weight. Surprise, surprise, this one has fallen by the wayside other than this last month. With the boot camp we signed up for (going on our second month now), I hope to have this in the bag by the end of the year!
- Double blog readership. Although the year started off strong with a shout-out from a fellow blogger, we had a few months of very slow posting (only two in June!) with too many things on our plate, but we’ve since refocused and we’re back to more regular posts. Just so much to always focus on, am I right!?

OUR combined 2014 goals:
- Work out twice per week. Kirby says: No comment. This one hasn’t quite worked out like we hoped with how busy we’ve been this year, but we have picked this back up in recent weeks, and we’re off to finish 2014 strong! Angela says: I’ve done way better than Kirby. I’ve made it to some Pilates classes, I’ve done the 7 minute workout and I’ve run. But yeah, two times a week is generous on the whole.
- Increase our net worth by 35%. We’re a little over halfway through the year, so that should mean we’re about halfway to this goal – theoretically. Well, we’re still generally on track, but not quite at the halfway mark that we would like to be. Hopefully the last half of the year we’ll be able to hunker down and focus now that we have some significant expenses behind us (read new fence, medical costs, and home finish-out costs to get as close as we can to finishing out our home renovation projects).

    What’s the most challenging resolution you’ve taken on?
    How do you motivate yourself to stick to it?
    Share with us your success (or failure) to stay on track of your goals.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net.

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The month we made money the weird way

Save Jar Means Saving and ReservingAJ: I love “found” money.

My pen and notebook budgeting system is really hardcore. It comes down to the last day of the month every time to see where things will net out. We have all kinds of factors that come into and out of play:

    - Did either of us travel this month and therefore do we have an expense report or two that needs to be reconciled?
    - Were our monthly bills lower than expected? (Ours are almost always lower than we expect and instead of lowering that budget I use this as “found” money which certainly isn’t the best system but it’s a system none-the-less!).
    - Did we go over our fuel budget? (We almost always do)
    - Did we over/under spend our food budget?
    - Did we over/under spend our everything else budget?
    - Did we over spend last month and need to recoup extra dollars to put towards savings in this month?

Then comes the fun stuff. What do we get to ADD back into our numbers? This past month has been especially fun:

1. I got a gift card from work for doing my annual health screen.
2. I did a really weird video survey in exchange for $100 through our insurance company.
3. We got reimbursement from a doctor for an appointment that was 8 months ago (Kirby says this isn’t “found” money since we paid them initially but I disagree. We accounted for the expense last November and now we’re getting credit back, so that counts as “found” to me and I’m running this ship :))
4. I got money for my birthday. This is the best kind of money – appreciation, celebration money.
5. We cashed in on a reward from a survey site that resulted in a free tank of gas. I’m a little bit obsessed with the concept of using my in-between-other-projects time to make money and this is SO easy to do it’s ridiculous. If I had more time lying around I’d probably be able to earn a tank of gas a month, but I’m on an every-other-month system right now which equates to an extra $300 in savings a year. Nothing to sneeze at!

    How do you track you “found” money and how do you spend it?
    Where do you find money in your budget?
    What is your philosophy on new found money?

Image courtesy of Stuart Miles / FreeDigitalPhotos.net.

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The misconception of UTMA and UGMA accounts: what you need to know

KJ: A bit shocking of a headline I imagine for anyone who has setup an UTMA or UGMA account for their son, daughter, niece, nephew, grandchild, cousin, whomever. In theory, I like the concept of an UTMA and UGMA account, but in reality, I think they are highly over utilized for what their intended purpose is.

Short for Uniform Transfer to Minors Act (UTMA) or Uniform Gift to Minors (UGMA), it even says it in the name that it’s a gift or transfer TO the minor.

So, what is the misconception? With an UTMA or UGMA account, any money you gift to the account is considered an irrevocable gift to the beneficiary. That’s right, it is a gift of money (or investments) that you have given to a minor, and it’s up to a designated ‘custodian’ (i.e. generally the parent) who oversees the account on behalf of the minor until they are of age.

Sure, it’s a great way to potentially help set aside some designated funds for a minor, but once the minor reaches the age of majority (depends on the state, but it is either 18 or 21), then they legally have full control of the account to do whatever they may want to do with the account. Woah. Anything? Yep!

One nice feature is that you can use the funds for the benefit of the minor at any age (can be junior high, high school, college, etc.) for living expenses unlike a 529 plan that must be used for qualified higher education expenses. See also our post on into to funding education where we also talk about other higher education funding accounts and their pros/cons.

Figure Sitting And Reading Book With Idea Bulb Stock Image

An UTMA/UGMA becomes the child’s account
While traditionally common to help set aside some funds for education for a child, many parents don’t often realize that the account is legally the child’s to use however they would want once they reach a certain age. Plus, if the parent wants to recapture some of the funds (say it wasn’t all used for education or other support for the child), then it is up to the minor to actually gift the money back to the parents! Sure, a saving grace is often that the child probably has no idea how to access the funds unless the parent discusses it with them, but still. They might begin to wonder why they have a 1099 for an account in their name!

Taxation implications
There really aren’t too many positive income tax implications for an UTMA/UGMA. The first $1,000 of gains/income each year (for 2014) is tax-free, and the second $1,000 is taxed at the child’s tax rates (typically very, very low), but any gains above that are taxed at the parent’s income tax rates. It prevents parents from being able to shift a lot of assets to their child to avoid a higher income tax bracket.

Know the restrictions
While I’m not 100% anti-UTMA and UGMA accounts – in fact, we have one setup for my nieces – the person setting them up often doesn’t quite realize the implications for how the account can be used. For us, Angela and I wanted it to be used for whatever K&G may want when they get to a certain age – be it school, help with a car down payment, help with a house down payment, etc. We knew the implications of setting up the account and how it may ultimately be used beforehand.

Consider other options
Sure, these account types CAN be appropriate from time-to-time to help fund education for a child, and they can be appropriate for a parent truly wanting to gift some funds to their child to use however they want.

However, for those parents hoping to exclusively use it for higher education costs and to potentially “recapture” whatever may be left, there are much better uses of the funds. Maybe a 529 plan would be more suitable (where the donor continues to control the account after the beneficiary is of the age of majority), and if you wanted to gift the account back to yourself at the end of the time period, you generally can find a way to do so much easier (noting there could be some gift tax and income tax implications for earnings in the 529 plan account not used for higher education).

With a 529 plan, you can also reassign the beneficiary to another child, relative, etc. if the first child either doesn’t go to college or attends a less expensive college than you planned (woohoo for your budget!). Something you don’t have the ability to do with an UTMA/UGMA.

UTMA/UGMA accounts may impact financial aid options
One factor impacting your out-of-pocket education costs is eligibility for financial aid. A downside to the UTMA/UGMA accounts is that the value of an UTMA/UGMA account may reduce the child’s ability to receive financial assistance in college. In fact, it isn’t uncommon to see financial aid reduced by 20%+ of the value that is owned in an UTMA/UGMA.

    Do you have an UTMA or UGMA setup for anyone?
    What made you decide to open that account type?
    If you chose a 529 plan, why?

Image courtesy of Master isolated images / FreeDigitalPhotos.net.

The misconception of UTMA and UGMA accounts: what you need to know is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

Ten financial commandments to live by in your 20′s

Old Antique Book
KJ: If you were to create Ten Commandments that would apply to your financial life in your 20′s, what would be on the list? Fortunately, MSN money recently wrote an article on 10 financial commandments for your 20′s that outlined their list of ten items that all Gen Y’ers should abide by. Do any of these resonate with you? Whether you’re in your twenties now (or were at some point), what words of wisdom would you impart on the younger generation of the shoulda-woulda-coulda?

No. 1: Develop a marketable skill
Check! – I would like to say that we have developed some pretty marketable skills. I’m a whiz-kid when it comes to spreadsheets, and Angela is at the forefront when it comes to interpersonal relationships and knowing how to sell [insert product or initiative] just about anything.

No. 2: Establish a budget
Check! – I would say we’re pretty on-board with this one. While the last few months have been a bit of a stretch with some extra items that have come up with our house, we always come back to “how can we pay for this without keeping anything on the credit card”? Sometimes expenses – and income – ebbs and flows, and this past quarter we decided to take the plunge and finally get around to some of the things around the house we had been holding off on for a while (read, finally painted our deck and got some patio furniture!).

Check out our tips on budget basics and building your first budget.

No. 3: Get insured
Check! – I would say we have this one down stat. I’m covered through my work, and Angela has coverage through her work for health insurance. Plus, we’ve got our ducks in a row for homeowner’s, car, life insurance, etc.

No. 4: Make a debt-repayment plan
Check! – None needed on this one. ‘Nuff said. Other than the house, we’re debt free!

No. 5: Build an emergency fund
Check! – Reached our goal for the emergency fund, but we continue to pad it for the next car purchase or big purchase down the line.

No. 6: Start saving for retirement
Check! – Between 401(k)s, Roth IRAs, and HSAs (that we intend to use as supplemental retirement by letting it grow over time instead of spending it today), we’re working toward that goal!

No. 7: Build up your credit history
Check! – With our process of putting all our expenses on a credit card to rack up some nice rewards and then paying it in full each month, coupled with our home loan, we’re on the track we need to be to establish some good long-term credit.

No. 8: Quit the Bank of Mom and Dad
Check! – Fortunately, once we got out of college, we were immediately on our own dime and learned to take care of ourself. We still thoroughly enjoy the “chef de Mom y Dad” when we get to spend time with family for meals, but no loans that we owe to our parents! This was a very high priority and goal for Angela and I as we started our adult lives together. We don’t want to owe anyone anything!

No. 9: Clean up your online presence
Check! – What happens on the internet, stays on the internet. Learn to keep a classy profile and think twice before you post something seemingly benign!

No. 10: Get your key financial documents in order
Check(ish)! We have most of our financial affairs and documents in order. One of our goals for this next quarter is to [finally] get our estate plan and wills in order. Being that I work in the industry, you’d think I would have this down, but we haven’t gotten around to it yet. Otherwise, between downloading our monthly statements from all accounts, reviewing Mint.com regularly, and discussing our quarterly presentation together, I would say the rest of our financial documents are in about as good order as they could be.

    What financial commandments do you live by?
    What would you tell your 20-something self?
    Share with us the rules that guide your life!

Image courtesy of adamr / FreeDigitalPhotos.net.

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What do rich people do everyday that’s different?

American flag with fireworks for the 4th of JulyAJ: We’ve been busy lately, REALLY busy. When I came across this article (Entreprenur.com), it provided a welcome perspective as to why we keep cramming things into our lives even when our cups already runneth over. This post feels like a good post-holiday reset as we all drag our way through life until Labor Day (am I right!?) just praying for a snow day.

I’ve pulled out a few of the stats that resonated loudly with me, and I’d love to know how you all feel about these. Full disclosure – there are a few on the list that don’t resonate with us all of the time: they don’t watch TV (I’m a TV-aholic), They read…but not for fun (I read for fun like a maniac), they’re big into audio book (NO THANK YOU)! So maybe I’m not quite “rich people” material yet, but I like to think we’ve got the fundamentals down.

    Rich people always keep their goals in sight.
    “I focus on my goals every day.”
    Rich people who agree: 62%
    Poor people who agree: 6%

    Not only do wealthy people set annual and monthly goals, but 67% of them put those goals in writing.

OF COURSE wealthy people set goals and they probably accomplish them, too! I think the thing that fascinates me more about this set is that only 6% of poor people claim they make goals. We’ve posted several times about our goals which are a huge priority for both of us as individuals and as a household. We love accomplishing goals together and while sometimes that’s more exhausting than anything else, it’s still a way that we thrive in our relationship together. I would love to know how these statistics change within the community of retired, wealthy people. Even when we’re on vacation I find myself setting goals – sometimes that goal is to get out of bed by 11, but it’s a goal none the less!

KJ: Goals are such an important part of personal (and professional) success and fulfillment. If you’re not setting goals – and keeping them in front of you – then how do you know where you’re headed? Be sure to make your goals specific, measurable, assignable (i.e. who will do it), realistic, and time-related (the S.M.A.R.T.).

    And they know what needs to be done today.
    “I maintain a daily to-do list.”
    Rich people who agree: 81%
    Poor people who agree: 19%

    Not only do the wealthy keep to-do lists, but 67% of them complete 70% or more of those listed tasks each day.

AJ: A to-do list seems like such a simple thing but whether the intention is to accomplish everything on the list in one day or over the course of six months, it’s a living, breathing representation of what it means to be a forward-thinking person. Rarely do people earn money by sitting in the wings waiting for money to come to them. Without a proper to-do list, my meal planning, incidental planning and over and above spending would go haywire. I have to actively plan to manage our expenses and staying on top of that means staying ahead of our retirement goals.

KJ: I am a fanatic for to-do lists. There’s just something about writing down your goals or task list for the day and being able to physically cross them off as you complete items that is quite rewarding. It creates a sense of accomplishment, and it gives you the buy-in that you are working toward something. Sure, not all items are accomplished each day, but the exercise I find is quite valuable!

    They aren’t hoping to win the jackpot.
    “I play the lottery regularly.”
    Rich people who agree: 6%
    Poor people who agree: 77%

    That’s not to say that the wealthy are always playing it safe with their money. “Most of these people were business owners who put their own money on the table and took financial risks,” explains Corley. “People like this aren’t afraid to take risks.”

AJ: I love this one. We know MANY people who play the lottery with the empty hopes of improving their means. Lottery-minded people are not traditionally saving-minded, financial goal-driven people. Why not redirect those hopes and dreams into something you can control – like investing in yourself through a potential promotion, education, or certification? Personally, if I’m going to take a chance on burning money, I’d prefer to do it in a way that results in a bigger reward, one that would help me achieve my goals of course!

    What else do you think differentiates the truly rich from the rest of the general population?
    Why aren’t rich people watching TV and reading for fun?
    What happens when rich people also become the least interesting people in the world? :)

Image courtesy of nirots / FreeDigitalPhotos.net.

What do rich people do everyday that's different? is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.