From CNNMoney.com on why saving is so hard:

We put too much weight on our current tastes when thinking about our future ones. “When we aren’t feeling hungry, it’s easy to go on an extreme diet,” says Loewenstein. The next day, of course, sticking to grapefruit and black coffee is a lot tougher.

And so it goes. It seems to be part of being alive–anything worth having isn’t easy to get. On top of that, it takes a lot of personal discipline.  That goes for dieting, fitness training, saving money, education…whatever. I’m lucky that I actually enjoy saving money, learning, fitness training, and…well, I don’t like dieting.

I honestly don’t even see it as much of a sacrifice, and I’m lucky to have a spouse who feels the same way.

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Cool…Americans are saving more!

The savings rate is already heading up, reaching 2.9% of income in the fourth quarter, the highest in seven years. Consumers received two income windfalls in 2008, the tax rebates in the second quarter and the boost to buying power from the plunge in energy prices last quarter. The corresponding spikes in the savings rate suggest they saved most of both.

It’s odd to me that some people are spinning this as a negative because consumer spending has fallen.  I’m just happy we’re back to a positive savings rate as a nation.  It shows that people are tightening their belts and planning for the future.

Part of the stimulus plan…give people a tax break for financing a car.

Uh, I thought a big part of this problem was that we’re overextended as a country.  And we’re supposed to cure the problem of too much debt by encouraging people to borrow money?  Seems a little counter-intuitive to me.

I was listening to Clark Howard yesterday and heard an interesting phone call.  I confirmed what I heard with my accountant, and it seems on the up and up.  The caller asked if this would be the perfect time to roll a traditional IRA to a Roth IRA with the markets being low.  The thinking is that the account value is low right now, so the taxes would be less than if you were to roll the account when it was worth more.

This also makes sense if you (like me) expect taxes to go up, or if you expect to be in a higher tax bracket when you begin to take money ou of your Roth.  My accountant said there is an income cap of $100,000 for 2008 (I’m safe) that goes away next year, and there’s another added bonus of waiting until January to do the rollover–taxes won’t be due April 15, 2010.  This gives you 15 months of growth (provided the market goes up) of gains before the taxes have to be paid.

Of course, check with your own accountant.  And please let me know if any of this information is inaccurate.

We hit our November budget almost exactly on.  Well, at least as far as income and outgo.  But as far as spending for each category went we were pretty far off.  That has a lot to do with the fact that we found out The Wife is pregnant.  She gets extremely ill with morning sickness that lasts 24 hours a day.  Imagine a never ending hangover and you get the idea.  And of course there are the cravings.  So we spent MUCH more on dining out (which mostly consisted of Taco Bell), while her personal spending was drastically decreased.  Mine was as well since I spent a lot more time at home taking care of her and our daughter.

We received a check from (I guess) an overcharge from when our daughter was born last year, and we spent the bulk of that on doctor visits and prescriptions for the coming baby.  As an aside, let me say how much we appreciate having good health insurance.  Insurance paid $730 for one of her scripts, which we would have gladly paid in full as sick as she was.  Still, we’re glad we didn’t have to.  :)

December is shaping up to be a month of big savings.  We’re not sure if my new job includes a Christmas bonus, but we aren’t counting on it.  There are some purchases we may make, but the rest will go to savings.  The big source of savings for the month comes from the fact that we’re traveling for 2 weeks to visit family.  Those two weeks we’ll be spending money that we’ve already saved for the Christmas holidays, so what would have usually gone for groceries, etc. will go straight into savings.

Ocober was a pretty crazy month for us.  We sat down last night to review how things went.  There were lots of unexpected expenses and a couple of business trips that brought in some extra cash from vehicle mileage.  We also took a trip to the beach that ended up costing us a little less than we’d budgeted (always nice).  All in all, we ended the month with a surplus of $259.  We decided to spend some of that on a new humidifier–ours busted this month, a birthday gift for a party we’re going to on Nov. 1, and a sushi date night for my wife’s birthday.  That left us with $109 which we moved into our “fast savings” account to help cover unexpected expenses in months when the budget is tighter.  That fund is now up to $300, which we think should be enough.

The November budget is a little weird for us too, because it includes an extra paycheck.  We’re using that check to buy plane tickets for Christmas and socked away the majority of it for gifts and other travel expenses we’ll be incurring in December.  We used the surplous to increase our little checking account buffer to move from one month to the other.  We’ve been moving money from savings to checking every month to cashflow everything, then back to savings when paychecks arrive.  Not a bad thing necessarily, but it’s a hassle

We’ve had a condo (the one I used to live in) on the market for six months now.  Our contract just ran out yesterday with our real estate agent, and last night we began interviewing new agents.  We, and by that I mean “I”, made the mistake of listing the property with a friend.  I have a post coming on that, don’t worry.

We met with three different agents to discuss re-listing the property. One was absolutely a no-go.  He didn’t seem to have much insight into the market, and didn’t have anything new to tell us.  Another was great.  She was really great.  She is utilizing all kinds of new marketing methods online, maintains a blog about the local real estate market, and is very knowledgeable and up to speed on our market.  The problem is that she targets the demographic that I’m in.  That’s not the demographic we’re going to be marketing to.

The agent we chose is high energy, highly aggressive, and older.  This was important to us because we want to sell the property ASAP, and our target buyers are either older (retired) people or parents looking to buy a property for the college students.  He’s very excited, but realistic.  When we interviewed him at the property he pointed out several things we need to change.

That’s what we were looking for.  Our previous agent was just like us–she didn’t understand why the property wasn’t selling.  This guy seems to know why.  I’ll keep you updated.

We tallied up everything from our September budget last night, and the results were not as good as we hoped.  We really thought we were going to come in under budget due to a couple of places we had surpluses, namely a visit from the in-laws that we’d saved for and overbudgeting for fuel and power.  We did have a surplus from the visit and power, but we broke even on fuel.  However, we had a copay for a Dr.’s visit for the baby we hadn’t counted on and went a little over on spending for redecorating our living room.

All told, we were about $80 over our written budget.  It’s not a huge deal–we leave a little wiggle room anyway by rounding off our income–but we like to have some carry over to save extra for the next month, and this is the first time we’ve been over budget in a while, so we were disappointed.

The solution is to probably extend the envelope system to more items.  That’s where we got caught on the redecorating expense…everything went on the debit card.  We’ll find out for sure in the coming months because we’re having to budget for Christmas.  Travel and gifts altogether are probably going to cost us somwhere in the neighborhood of $1,500.

Thanks to FinancialBlogger for hosting!  Here’s a sampling of a few of the great articles included:

Consumer Debt Worst Offenders

A lot of people feel like their drowning – and that they’ll paying bills and consumer debt payments till the day they die or they hit bankruptcy, only to start the cycle again. If you’re in this situation, this doesn’t have to happen, but you have to act now!

Learning From Our Mistakes:  Our First Auto Loan

But good news was that I had an Old Navy credit card account (which I had never used), so I could actually get a loan – at an interest rate 24% APR. It was the only way, they said, that we could get a car.

Uh oh…I don’t like where that’s headed.

10 Ways to Save on Gas and Improve Mileage

Don’t automatically assume that a hybrid will save you money on gas - Recently, I was at my Lexus dealer for a routine maintenance. I asked the service rep about the hybrid. She was honest enough to say that you will probably save on gas if you only drive in the city, but it is not really that effective if you are always driving on the highway. So do not automatically assume that getting a hybrid is going to save you on fuel. In fact, before you consider the following a hybrid, consider the next tip.

I’ve talked to several people over the past few days who are really buying into the whole idea that there is a crisis on Wall Street.  It seems like they pay special attention when a politician or pundit talks about the fact that everyone’s 401k is dropping and their retirement accounts are being wiped out.  Well…

Hang on a minute…let’s think this through.

When are you planning on retiring?

Unless you’re going to retire next month or possibly next year, there’s no reason to freak out.  The value of your account may be dropping, but you haven’t actually lost any money until you sell.

Are you buying or selling?

If you’re like me, you’re contributing to your 401k, not pulling money out of it.  If you’re buying, there’s no reason to freak out.  I bought two weeks ago too, and this week everything is on sale.  If I thought it was a good deal two weeks ago, doesn’t it make sense that I’d think it’s a great deal this week?

Are your kids healthy?  Is there food in your refrigerator?

Seriously.  There is no reason to freak out!