His Hers Money

When we go grocery shopping we don’t go empty handed. We have a list, our coupons and a plan. This weekend’s grocery shopping trip is an excellent example of what our bill looks like. This is for two people and we are not starting from scratch as we have things in the freezer / pantry / fridge at home already that we are augmenting. I look at what’s on sale, what coupons I have and what we need.

This week’s trip was to Safeway but we don’t always shop there. It all depends on who has the rights things on sale that week.

• Ketchup $.99
• Cheez-Its $1.47
• Cranergy Juice $2.50
• Canned Cat Food 6 - $.33 each
• Kraft Cheese Singles - 2 - $1.50 each
• FF Half & Half $4.49
• Yummy mini ice creams 2 - $1.00 each
• Limeade $1.25
• Duracell 8pk AA $2.49
• Men’s Shave Gel $1.50
• OM Hotdog - 3pks for $1 total
• Lean Hamburger $6.11 for 4.8lbs
• Jumbo Raw Shrimp $5.39 for 0.9lbs
• Green Onion $0.99
• Ginger Root $0.25
• Cinlantro $0.99
• Beer 24pk $12.99 (July 4th parties)

Our total was $50.24 and obviously the beer at $13 was the biggest item but with July 4th parties coming up next weekend we grabbed it at a good price to bring to a big party we are attending. The shrimp was a treat for us which we will grill up for dinner and the hamburger has already been mixed up and made into hamburger patties and in the freezer for later use.

Our receipt claims that we saved $61.34 (56%) off of our bill which in fact we did but we wouldn’t have bought some of the items if they weren’t on sale and had coupons to go along with them. The hot dogs for example we couldn’t pass up at 3 Oscar Myer packs for $1, I just threw them in the freezer for later use. The same thing with the cheese slices, I’m not a huge fan of that kind of cheese but at that price I’ll make so for a couple weeks!

This weekend I was flipping through an old Money Magazine from November of 2007. We usually use the library for books and reading material, to include magazines. Typically you can get recent copies as soon as they become a month old but occasionally I will pick up some older ones as well. The content really doesn’t become outdated to the point of uselessness.

This one particular article was about the number of jumbo mortgages in default, specifically a 65% increase in the number of prime jumbo mortgages in default between June 2006 and June 2007. I can only believe that the trend has continued right into 2008. We live in the Washington DC area so in order to buy a house we would fall into the jumbo mortgage category since a typical 3 bedroom house is priced in excess of $600k.

We currently rent and live in a brand new, very nice apartment building that we are perfectly satisfied with. I don’t expect us to be calling up a real estate agent any time soon in this area. But, yesterday we were taking a little drive to go see the new Extreme Makeover, Home Edition house that they are building this week in MD. We drove down a long, windy road through what turned out to be a very high end, beautiful area.

The houses on both sides of the street were HUGE, not just big, but HUGE! I’m talking jaw dropping, have to look kind of houses. We thoroughly enjoyed the drive and getting a chance to see these homes. What surprised me was the number of For Sale signs out in front of these places. So, I decided to do a little online research into what these homes actually cost and how many were on the market.

I plugged in a started search criteria of greater than $1 million and the results I got back exceeded the max allowable number of 250 so I bumped it up to greater than $2 million and was able to it down to about 200 results. I was in shock that one little town could have that many homes in that price range on the market. This really was a small area that wasn’t too densely populated as each home sat on a significant lot.

In general, about $3 to $5 million got you seven bedrooms, seven bathrooms and if you went up to the $8 million dollar range you got around ten bedrooms. Yes, they were beautiful homes, but everyone would agree that this is a bit excessive! I have to believe that people got themselves into mortgages that they just couldn’t handle and in this case multiple mortgages.

If you can’t afford a traditional mortgage on a piece of property than you really can’t afford it in my opinion, clear and simple.

Yesterday I covered the first three ways in the “Six Simple Ways to Retire Rich”. Thanks to automatic 401(k) plans and one-stop investing options, saving for retirement is a cinch. Editor’s note: This article is adapted from Kiplinger’s Retirement Planning 2008 guide.

I promised to cover the last three ways today so here they are!

Simple Way #4 Consider a Roth

I mentioned this quickly in the last Simple way but they give it an entire section in this article. While your 401k gives you your tax benefits up front, the Roth IRA gives you your tax benefits on the other end at withdrawal side. The new Roth 401k also offers tax-free income at retirement. The Roth IRA has contribution limits of $5000 in 2008 and does have some income limitations so a little additional research is warranted but whomever you set your account up with should be able to help you determine your eligibility and limits.

I personally max mine out each year in twelve handy little payments. Most plans will allow you to make monthly contributions directly taken out of your checking account or whatever account is most convenient for you. Again, the younger you are when you start funding this type of account the more you will benefit from the advantage of time.

Simple Way #5 Don’t Cash Out

I personally was kind of shocked by this one. Not shocked by the advice but shocked by the related statistic that they mention that nearly have of all workers cash out their 401ks when the leave their job rather then rolling it over or even just maintaining it there. If you cash the account out you get hit with both taxes and penalties and forget the whole advantage of time, you just started that clock all over!

I have rolled a 401k or two (or even more) in my time. I can’t tell you how easy they make it for you to do it. I have to believe that it actually requires more work to cash it out these days that is does to roll it over. I recently heard a commercial on the radio about a guy who rolled his old 401k over in the same about of time that his friend ate a sandwich at lunch, it really is that easy.

One benefit that I enjoy as a result of rolling all of my 401ks over into one account is that the value of that account is obviously greater that the individual accounts were so I now qualify for a higher level of service from the company who holds my money. Some of the perks are free checks, a special phone service number, fee waived accounts, etc.

Simple Way #6 Sell Company Stock

Many people have a portion of their 401k tied up in their company’s stock. While it’s great to be confited and supportive of your company, it’s not always a great strategy to put all or even half of your eggs in one basket. After the whole Enron scandal and the Pension Protection Act of 2006, employers must now allow workers to cash out their company stock within three years to diversify their 401(k) investments, and many employers now allow their employees to transfer out at any time.

It’s always best to diversify your holdings. This also something you need to look at if you have your savings and investments spread among numerous accounts. If you choose not to roll your old 401ks into one account make sure you look at the overall balance of your accounts as a whole not individually. If you do have a personal advisor than they can do this for you, if not, make sure you bring up any additional investments you have when speaking to the folks at the individual companies.

As always, I’m not a financial advisor, just an ordinary person trying to make the right choices, just like you so please do seek professional advice. I hope my comments and observations help you know what the right questions to ask are and help you make the right choices for your particular situation.

Today while surfing around the internet I came across an article called Six Simple Ways to Retire Rich.

Since everyone wants: One: To Retire Rich and two: For it to be Simple, I figured it was worth a read. While a few of the “Simple Ways” were no brainers to me I was surprised by a few of the statistics that they quote that show that obviously they aren’t to everyone. I will discuss the first three “Simple Ways” today and the last three tomorrow.

Simple Way #1: Don’t Opt Out

With this they are referring to how many companies these days are automatically enrolling employees in the 401k or retirement savings programs when they are hired in and in order to not participate you have to actually opt out.

I think this is a great idea, especially for young people who are just entering the workplace and may not really understand how the 401k works yet. The article says that 85% of adults surveyed started saving earlier as a result. This is great because as everyone knows the biggest ally that you can have when it comes to retirement savings is time.

Simple Way #2: Get Help from the Pros

Most retirement savings plans have some sort of target- date retirement fund which claims to have the appropriate mix / balance of funds in it for the timeframe you want to retire and usually if you don’t choose other wise your plan may automatically enroll you in this fund. While that may not be a horrible choice for you, it may not be the best either.

I do have a personal financial consultant and for me it has been working out pretty well and I’m happy. That doesn’t mean you need to run out and hire one yourself. If you have a 401k a good resource is to talk to someone at the company that administers it. My company recently changed plan administrators and the representatives came by and spoke to people one on one and they are available by telephone as well at no additional charge. I know a number of people in my office who have taken advantage of this free professional help.

Simple Way #3 Check Your Progress

Keep an eye one the big picture, including your insurance options, retirement savings, emergency savings, etc. It’s easy to get bogged down just looking at the percentage that you are putting into your 401k but don’t’ forget about making sure you have the correct amount of life insurance in place and make sure you have kept the beneficiary up to date as well. You don’t want your ex to be still on there from like ten years ago and your kids to get nothing! Another insurance need to consider is your long and short term disability coverage whether it’s through your employer or a private policy it’s definitely something to consider.

Another investment to consider in the mix is your Roth IRA if you are eligible to contribute and of course don’t forget your emergency savings account. It is probably worthwhile to sit down with a professional to get some solid recommendations to make sure you are covered.

I am so excited about our upcoming vacation to Jamaica! Neither of us has been before so it will be a new experience for both of us. Originally the vacation was planned as our honeymoon but due to actual wedding date changes which seem to be never ending right now we are taking the trip as a pre-wedding-moon.

We are staying at one of the Sandals resorts which are all inclusive which really helps with the budgeting aspect of the trip. There are a couple extra activities which we are considering doing which we realize are extra that we need to identify, budget and pay for and since the trip is in just a couple of weeks I guess we ought to get on that soon :).

We have been on a couple of vacations in the year and a half we’ve been together. We went to Dallas for an extended weekend, Florida to visit / meet the family over Thanksgiving after we got engaged and a couple more local trips that we drove to.

This is a very much needed vacation for both of us as work has been an absolute bear for me requiring extended work hours and various stresses at HIS’s job as well. We’ll try to post a couple pictures when we get back mid-July.

Well, I will start by apologizing for our lack of posts for the past week. It’s not that we were extra-ordinarily busy or anything, we just got busy with other “stuff”. If you remember in an earlier post we discontinued our gym membership since HIS can use the gym at work for free, I now walk to work (2 miles a day round trip) and we both can use the small gym in our apartment building for free.

Well, I have had absolutely no motivation recently to work out at all. I have only walked to work a few times a week due to some extremely hot weather and rain. So, in order to fight the battle of the bulge and get ready for our upcoming week long trip to Jamaica (YAY!) I have decided to look for a group activity that I can participate in to get some exercise.

I’m leaning towards a group activity so it will help keep my attention as well as the opportunity to meet some new people. In the past I have tried a soccer league which got a thumbs down due to the timing of the practices and games which were just too late at night. I’m totally not interested in softball no matter how many people ask me to play. I used to row crew in college and I think it will be my next sport to try. I’m hoping it’s like riding a bicycle and comes back to me easily.

Living in the Washington DC area we have access to a number of rowing clubs at a variety of costs, some of which I think are more than reasonable. I’ll write more after I give one or two of them a try.