I decided this morning on my way to work that I’m moving to Hawaii. Not tomorrow, but before I turn 40. I walk to work, so I am acutely aware of the weather. And this morning the weather feels more like I should be shopping for Thanksgiving dinner instead of planning my Memorial Day picnic. My hair is a mess from the wind and mist, my umbrella useless. It’s the middle of May, for crying out loud. Why are my hands ice blocks? I’ve had it.

So I seriously started to think about where else I could live that would offer me career opportunities, decent weather year-round and a city that is conducive to walking and biking instead of driving everywhere. (That rules out Southern California and the entire state of Texas) Hawaii tops the short list of places that fit, and as I strive to keep myself open to all the possibilities in life, I have decided that instead of saying, “That’s silly, Hawaii is expensive and far away and you don’t know anyone there,” that I’m going to seriously look into it.

But first things first:

I have a lease that runs through August, 2014, so it will be at least 15 months before I can consider going anywhere without a significant financial hit to break that contract. As I consider whether I could really make this happen, that feels like a good timeline to explore the option.

First, I need to find out if Hawaii truly is somewhere that I’d want to live. Before I even start looking at job opportunities or rental rates for apartments, I need to physically check it out. In other words, I just set my first preliminary goal in possibly making a huge life change: visit Hawaii.

Here are the steps to plan any big trip or large purchase:

1. How much is this going to cost me? I need to research exactly where I want to visit/potentially live, and then price out flights, hotels, car rental, food and other costs. I can’t forget to include other incidental costs like transportation to and from the airport, baggage fees, hiring someone to care for my cats while I’m gone and any loss of income from taking time off.
2. How much do I need to save each month? Once I have the total cost of the trip, I need to figure out how much to save. I can approach this two ways: 1. By setting the date of the trip and dividing the cost of the trip by the number of months between now and then, or 2. By figuring out how much I can afford to save each month, then dividing that into the cost of the trip to tell me how many months it will take to get there.
3. How am I going to save that amount? This is the tricky part. Let’s say I figure out that I need to put away an extra $400 per month. I can’t just go pick it off the money tree, so I need to take a hard look at my current spending and decide where I am going to cut back.

You might get to the third step in your own goal-setting and bail – if I had an extra $400 per month, wouldn’t I already be saving it? Not so fast… when I categorize every dollar that goes out of my checking account each month, I find that I spend WAY more money than I would have guessed on dining out. In order to make Hawaii happen, I’m not going to stop eating out. But I am going to have to be more mindful of it and set some limits. I’ll probably also think twice about adding clothes to my wardrobe unless I have a specific purpose for which I have nothing in my closet already.

I’ll set up an automatic transfer to a savings account that I’ll establish specifically for this trip to take away the temptation to procrastinate any payments. Capital One 360 is great for this type of savings – you can open up multiple accounts for various savings goals.

The tough thing about setting and achieving any financial goal isn’t necessarily the planning and figuring out how (although that’s a big part of it), it’s addressing your money mindset to ensure that you engage in the behavior that is going to get you there. It’s hanging tough and not raiding your savings when something else comes up. It’s reminding yourself on that next windy, cold, miserable walk to work that you have a higher purpose, which is why you’re not going to flag a cab.

What big thing in your life can you make happen if you follow these steps and tell yourself you can do it?

The post 3 Steps to Achieving Any Savings Goal appeared first on Career Girl Network.

According to a Harris poll conducted by the AICPA in March, 2012, the average adult checks their social media accounts such as Facebook or Twitter an average of six times per day. The same survey revealed that less than two in ten people who check in with social media at least daily also check their bank accounts regularly. Sound familiar? When was the last time you checked the transactions in your checking and credit card accounts?

Keeping in touch with what’s happening in your financial world is key to being in control of your life.

First, the things we pay attention to manifest in our lives. Ever notice that when you buy a new car that suddenly it seems like every other driver on the road has the same one? My friends who are trying to get pregnant tell me that it seems like every woman they pass on the street is sporting a baby bump.

Last time I checked, there wasn’t a sudden surge in expectant mothers. It’s because that’s what my friends are paying attention to. Same goes with your money. If you turn a blind eye to what’s happening in your checking account, that behavior manifests itself in a lack of control in other areas of your life.

Additionally, if you’re not taking the time to go through the transactions in your checking or credit card accounts, how do you know that there isn’t fraudulent activity on your account? How do you avoid overdraft fees?

Let’s get real here – I know why you’re not looking. Because you know you’re not making the healthiest choices for yourself. Looking at where your money is going will cause you to confront your shoe habit or acknowledge your addiction to Target. I get it because I’ve done it. Just like starting a healthy eating program starts with writing down everything you put in your mouth, healthy finances start with paying attention to where your money is going.

Please do yourself a favor and make a little appointment with yourself to review your spending at least monthly. (you can have wine while you’re doing this) You don’t have to do anything other than simply scroll through the transactions and verify that the amounts and merchants are correct. It’s kind of like scrolling through your Facebook News Feed, except without all the baby pictures and ”Ugh, so tired…” posts.

If you want to take it up a notch, start keeping a record of your balances on a monthly basis. Just write them all down and keep a tally on a monthly basis. The next level would be to draft a Net Worth statement for yourself, but I’ll talk more about that in a later post.

The bottom line is that if you have any sort of discontent in your money life, it’s probably carrying over into other areas of your life like your career and your personal relationships. The first step in righting that discontent is to simply start paying attention to your money. Log in now!

The post When Was The Last Time You Checked Your Accounts? appeared first on Career Girl Network.

Recently, I’ve told you about my own personal plight to change negative financial habits in my life. I changed my credit card settings, and I’m working on living smarter in a post-cash world. This last week, though, I realized sometimes making smart financial choices isn’t always about saving or course correcting. Often, it’s about avoiding places where you might already be losing money.

Here are a few places where your cash may already be going up in flames and ways to get it back!

• You’re not getting credit for airline points. Even if you only fly a handful of times each year, being a member of an airline frequent flyer or credit card rewards program is worth it. If you’re anything like me, you’ve probably signed up for a frequent flyer program at some point, but don’t always remember to enter your number every time you book a flight. Last week, I went back to my United profile (created years ago) and put in all of my flights from the past year (thank goodness I saved confirmation emails). Now, I’m nearly to Gold status on United! Wow!
• You’re paying per text. I hear about so many people who are continuing to pay per text on their cellular phone plans instead of buying a plan. This made sense five years ago when you might have been new to texting, but now that $5 a month is probably more economical. Change it now!
• Get a programmable thermostat. Sure, you want to crank up the heat when you’re home so you’re nice and toasty, but if your heat is running high like that all day, you are losing precious dollars every day. Programmable thermostats can be found at any home or hardware store for $30 or less. Take the time to program your heat and air conditioning to remain low or off when you’re not home during the day and save valuable cash.
• Cut fruit and package vegetables the minute you get them home. Honestly, Career Girls, how many times have you thrown out bad fruit you ordered but never ate? Too many, right? Instead of throwing away expensive fruits and veggies, make time immediately upon bringing them home to cut them up and put them in individually packaged containers, wash them, and be sure they’re 100% ready for immediate consumption. Then you’ll be much more likely to use them before they go bad.

Where can you stop bleeding cash? It’s easier than you think.

The post You’re Already Losing Money With These Habits. End Them Today appeared first on Career Girl Network.

We’ve all been there.

The candy bar we didn’t realize how badly we needed until we are standing in the checkout line. The purse that we knew we didn’t need, but was 50% off. The trip to Target for laundry detergent that ends up in $100 spent on random things once we get to checkout. The extra food we ordered because we haven’t eaten all day and surely we will be able to finish it all. The snowshoeing and wine adventure that LivingSocial sent us…I mean, we’ve never been snowshoeing, but we’ve always wanted to go, right? Or something. I mean, there’s wine involved. Whatever.

Ah, the impulse buy. That thing we really shouldn’t spend money on, but damn, look-at-this-sale-oh-my-god-it-will-never-be-this-cheap-again-ever-as-long-as-we-live! So we take the cash we know we really can’t spare, justify our decisions mentally to ourselves over and again, until we get to the counter and find ourselves the new owners of this purse-holding-thing that we can set on top of the bar so that we don’t have to put our purses on the ground…that we will probably never use again.

To be fair, marketing and advertising have figured this out about us and have capitalized on it lucratively. Jacque Wilson recaps a telling study:

Advertising encourages spur-of-the-moment emotional purchases that are triggered by seeing the product, according to the editorial. The way food is arranged in a grocery store can have a big impact on what consumers buy. A 2009 study showed products placed at the end of the aisle account for 30% of all supermarket sales.

“People lack the capacity to fully control their eye gaze, and what they look at the longest is the strongest predictor of what they will buy,” the authors write.

So with the long, giant claw of marketing reaching out to our basic mental/emotional responses and beckoning them come hither, how do we maintain frugality and resist that impulse to spend what little cash we have? A few pointers:

• Ask yourself how this buy will affect your financial goals. If you’re going to be a Frugal Career Girl with financial freedom in mind, you’ve got to think about how spending $50 on that two hour cheese-making class is going to help or hurt you on your way to achieving the goals you’ve set for yourself. If you’re behind on bills or are trying to save for something important, the dessert tray after dinner is probably something you can pass on.
• Do you really need that? Every time I go to the drugstore, I walk out with two new bottles of nail polish. Every. Damn. Time. I have a ton of nail polish cluttering up my medicine cabinet, most of which I use on a once-monthly basis, trading out colors weekly. It’s only $2 a bottle, right? What harm is that? Until I remember that it’s $4 (plus tax) a visit, and if I visit the store twice weekly, that’s $8 a week and damnit, now that’s $32 a month. On nail polish. I can spend half of that on a Netflix-style luxury-polish sharing service...and I wouldn’t take up so much cabinet space. Figure out what you truly need and don’t need and start thinking in these terms. It is nice to splurge occasionally on the “want” category, but start asking yourself if you really need what you just picked up off the shelf before you make it to the counter.
• Will this be around in the future for me to purchase? With the way that stores advertise their “one-time-only” sales, it’s easy to justify our purchases when we think that this might be our only opportunity to get this product at such a steal. If you don’t realize that these sales are an ongoing, continuous gimmick that stores use to lure in bargain-focused customers, then you might think that your purchase is a steal. But it’s not. Chances are that even if this is the only time that your “want” will ever be on sale, you still have the great fortune of living in the age of the interwebs, where you can find whatever your “want” is for half of the price that it is on sale in your favorite department store. Internet win! The same goes for restaurants; my friends and I always want to order ALL OF THE SUSHI ON THE MENU. But then one of us reminds the hungry masses that we should order bits at a time–if we are still hungry after, we can always order more. And guess what? We never do get to that “ordering more” time; thank god for reasonable friends.

Remember that your financial goals are within your reach, but they require some laser focus and determination to get there. Impulse buying has become an accepted part of our culture–so much so that stores don’t think twice about tricking you into that candy bar anymore–but it doesn’t have to become an accepted part of your wallet or your lifestyle. Start thinking deliberately about your purchases and find your inner Career Girl strength to walk away from all of your “wants” and head toward your “needs,” until you have the means to do both.

The post The Frugal Career Girl: No More Impulse Buys appeared first on Career Girl Network.

April is Financial Literacy Month! In honor, I’d like to share the guidelines I use to answer the questions I frequently field as a CERTIFIED FINANCIAL PLANNER^TM. People often ask me, “How much should I be saving?” and “What’s a reasonable amount of money for me to put away for my kids’ education?” The answers to these questions vary according to each person’s financial situation and values, but here are some good starting points:

Emergency fund – This is one of my 3 financial ground rules that bear repeating: You should have six months of expenses tucked away in a separate savings account that you would only tap in a time of true emergency. The purpose of this fund is strictly to be there if you lose your job or experience an extended, expensive illness. For tips on finding some additional cash to save, check out my Penny Pinchers article over at Feed the Pig.

Education funding – Your annual savings depends on what kind of school you want to send your child to. For public, in-state universities, strive to save $1,000 each year for 18 years. For a semi-private university, shoot for $3,000 per year, assuming about $15,000/year in tuition. And if you want to send your kid to an elite private school? Plan to save $6,000+ per year for all 18 years.

Retirement amount – If you wish to retire in your early 60’s, you’ll need to have saved about 16 times the annual amount you’ll need to live on. In other words, if you think you’ll need $100,000 per year to live on during retirement, then you’ll need $1,6 million saved in order to retire.

Retirement savings rate – Assuming you start saving early, putting 10-12% of your income toward retirement should get you to your goal above (saving for education is extra). And I’m a huge fan of starting early – not only does it help to establish the habit before you’re burdened with additional costs like owning a home and raising kids, but you’ll have compound interest on your side. Save early, save often!

Life insurance – If you need life insurance (the typical reason you’d need it is because you have someone dependent upon your income who would be financially devastated if you passed away), a typical benchmark is 10-16 times your annual salary. So if you make $75,000 per year, you should have at least $750,000 in life insurance.

Health insurance – It’s tough to know which type of plan to choose when usually the options are so different from one another. When choosing a plan for myself, I always look for two things: hospital coverage (you want 100% coverage after a low deductible is met – most hospital stays exceed $10,000, easily) and at least a $1 million lifetime cap. Anything lower and even a minor health issue could have you up against the cap.

Of course these are not set-in-stone rules, but instead suggestions to help Career Girls ensure a secure financial future. What other questions can I answer? Please let me know your questions in the comments below.

The post Guidelines Financial Planners Use appeared first on Career Girl Network.

Saving money isn’t always about finding the best deals or sales, sometimes it’s about buying at the right time! Our friends at Real Simple are giving you the full guide on “The Best Time to Buy Essentials” – everything from furniture to shoes to certain kinds of clothing.

Here are two of our favorite tips from Real Simple:

May: The Best Time to Buy Athletic Apparel and Shoes

Why: As people emerge from their winter cocoons, retailers start offering discounts that will lure customers outdoors and shed their last-season inventories before the end of the summer, says Butler. If you can’t find what you’re looking for in May, shop when the seasons change or after a natural disaster. Oddly enough, these events cause retailers to extend sales or reduce discounted items even further. The reason? Some people will wear out their shoes during storm cleanup, and those who are unaffected invest in more durable pairs in the event that destructive weather hits in their ZIP code.

Your savings: From 30 to 60 percent.

October: The Best Time to Buy Jeans

Why: The rush for back-to-school clothes has ended, so retailers are cutting prices on leftover inventory, which includes a lot of denim. “People are becoming more frugal with back-to-school purchases and, as a result, stores will have excess denim,” says Kathryn Finney, founder of thebudgetfashionista.com. Check out department stores and Loehmann’s and Marshalls for marked-down designer jeans. You’ll also find considerable savings―about 50 percent―on denim during the warm summer months.

Your savings: Thirty to 60 percent below retail price. Also look for buy-one-get-one-free deals at some stores.

Click here to read the rest of these cost-saving seasonal buys.

The post Buy Seasonally and Save BIG Money appeared first on Career Girl Network.

Overspending happens to all of us. Even when we think we have a budget set-in-stone, there are certain times in our lives when overspending seems close to inevitable. Our friends at LearnVest recently compiled six of these high spending times with “6 Times We Tend to Overspend.”

Here are two of LearnVest’s 6 Times that resonated most with us:

You’re Going on Vacation

This illustrates a double-whammy of financial don’ts: The spending trigger coupled with the sunk cost. You’ve just booked your dream trip, and since you only have a finite number of vacation days, this getaway has to go perfectly. Which means you must have every possible accoutrement to make it so.

You’re Overworked

This is the king of “I deserve to treat myself” situations. After all, you rationalize, you’re working 40//60/100 hours a week, so don’t you deserve something nice? For my online shopping friend, her release comes in the form of cardigans. For others, it might be frothy coffee or fine wine.

Click here to read the rest of the article to avoid these 6 pitfalls.

The post 6 Times We Overspend (and How to Stop) appeared first on Career Girl Network.

Our friend Allie LeFevere is one of our absolutely can’t miss bloggers, and her article last week on “15 Tips to Save Money While Going Green” was inspiring! We all want to help the environment, but often environmentally friendly products and services are more expensive than those we’re used to.

Here are a few of our favorites on Allie’s list of 15 tips. To read the rest of Allie’s incredible tips in the article, click here.

Turn Off Computers: don’t just put them to sleep at night, actually shut them off. You will save an average of 4 cents/day — hey, that’s $14.60 a year!

Don’t Rinse: not your hair silly — your dishes.  Skip rinsing your plates before putting them into the dishwasher. You will save approximately 15 gallons of water per load. Heyo!

Don’t Pre-Heat: turn the oven on after you put the dish in, unless absolutely need — and look to see if it’s finished through that nifty little oven window instead of opening it and losing heat.

The post 15 Ways to Save Money While Going Green appeared first on Career Girl Network.

Two magazines arrived in my mailbox last week telling me that NOW is the time to buy a home; the real estate market has bottomed out and prices are starting to go back up. That whole buy low, sell high adage? This is buying low.

To calculate whether it’s cheaper to buy or rent, I use this ratio: 

If X is less than 15, it’s cheaper to buy than rent. Right now, it’s definitely less than 15 in Chicago, where I live.

Here’s the thing: I’ve been a renter for about fifteen years, and the longest I’ve ever lived in one place was just shy of 3 years. (I’m not counting those 6 months that my name was on the deed of a “dream home” before I realized it wasn’t my dream – that’s a different conversation). Considering my history, it’s safe to say that the thought of committing to one address for an extended period of time kind of scares the crap out of me.

But how can I ignore the hard financial facts that tell me that I could be building equity in a home with each big, fat check that I write for rent instead of it fattening some real estate investor’s wallet? Add in the fact that my lease is up soon and my rent is going up about five percent… it should be a no-brainer, right?

Choosing to invest in a home is about more than just the monthly mortgage payment though. First of all, if you’re not planning to stay for at least three years (some people might say ten years after the recent market crash), don’t bother. If you decide to look into buying, make sure you factor in all the costs like property taxes, condo assessments, homeowners insurance, maintenance and any improvements or changes you’ll be making to the property.

If, after looking at those numbers, you decide to take the plunge, a few questions to answer first:

How much can you afford? Your total monthly housing cost (principal + interest + property taxes + insurance) should not exceed 28% of your monthly gross income (gross = your pay before taxes, insurance, 401k, etc). This ratio applies to rent as well. Anything more and you’ll find yourself “house poor.” Know your total number before you start looking and don’t let your Realtor talk you into going outside your price range.

How much should you put down? The gold standard is 20 percent. This way you’ll avoid having to pay private mortgage interest (PMI) and you’ll get the best interest rate. The more skin you have in the game, the more likely a bank is going to lend you the rest of the money at a lower rate.

What type of mortgage should you obtain? You’ll have several options. Don’t pick based just on monthly payment.

• 30 year traditional: A 30 year mortgage is considered the standard – you’ll have a fixed interest rate and fixed payment; your home will be fully paid for in exactly 30 years. This is your parents’ mortgage.
• 15 year fixed: This type of mortgage is becoming more popular, as people are more debt-averse and want to own their homes sooner. Choosing this option makes your monthly payment considerably higher, but you’ll also pay much less in total interest.
• Adjustable Rate Mortgage (ARM): ARMs usually start at a below-market rate that will adjust with the market after a certain period. These were very popular during the buying boom in the early 2000’s – lots of people took out ARMs, figuring they’d just sell before the 5-year adjustment period. Then the market tanked and they were stuck with a house that was worth less than they owed AND a higher mortgage payment. An ARM is really only appropriate when you won’t be in the property for more than 1-3 years. Trying it for longer is a risk.

What interest rate can you expect to be offered? The rate that lenders offer you will be based on the current mortgage rate environment as well as your credit score. Before you apply, you might want to find out what your FICO score is so you can fix anything that needs fixing before applying.

So tell me in the comments – are you house hunting? Or are you like me, hesitant to put roots down just yet?

The post Is Now The Time To Buy A Home? appeared first on Career Girl Network.

Spending. I use that word intentionally. There’s buying….there’s shopping…there’s paying…and separate of those two things is spending. Let’s take a minute to talk about the differences here.

• Buying. The actual act of purchasing something. When you to go Walgreens to get contact solution or toothpaste, I place this in the buying category. You need it, so you go get it.
• Shopping. Now, this can be broken into lots of pieces and categories, but to me the word shopping means going to a store or stores for multiple things in one fell swoop. You need cleaning supplies, a new toilet brush, a birthday present for your mom and a card to go with it, new pens for your office, etc. So you go to Target on a shopping trip. Groceries are also in the shopping category.
• Paying. There are things you don’t need to buy or shop for, but you still have to pay. Think bills, student loans, gas in your car.
• Spending. I constitute spending as any of the categories above, and more that also fits into the category of “I don’t need it, really.”

What kinds of things fit into the “spending” category?

• You go to Walgreens for contact solution and toothpaste. You also buy the new Maybelline lipstick you’re seen on TV recently, a copy of SELF, three bottles of Diet Coke, a pack of mints, and a new kind of shampoo you’ve been wanting to try. Suddenly, you’ve gone from buying $8 in necessities to spending $30 on things you probably didn’t need.
• You go to Macy’s to return something that didn’t fit just right, and instead of doing just that, you browse the sale racks and buy two sundresses you’re not sure you’ll ever wear because, hey, they’re only $25 each. You just spent $50.
• You make mutually agreed upon plans to have lunch with a friend, and somewhere in the process of seeing the check, you (for no reason at all) say to your friend, “Let me get this.” You know you’ve done it. Why? She agreed to have lunch with you. You didn’t just pay, you spent!

Confession: I am a spender. I do all of the above and more, and suddenly, I’m not just buying, shopping, or paying…I’m spending. How does that happen? The good news is, I found a great way to control the spending. Last week, I was watching an episode of Oprah: Where Are They Now and heard the incredible Martha Beck give great advice to a fellow spender. She put her on a “spending cleanse,” just for a week, and 10 years later when Oprah caught up with that same woman, she said that one week in her life (which for her, actually turned into a month long spending cleanse) changed her life. So I thought, why not? It’s Martha Beck! I’ll give it a shot.

The Rules of a Spending Cleanse:

• First, be sure all of your necessities are taken care of…there’s gas in your car, your bills are paid, etc. This spending cleanse isn’t about those things.
• When you leave the house in the morning, leave with one $20 bill, no credit cards, no debit cards, and your ID. That’s it.
• Do this for one week.

Now, I may alter this a little. For instance, I’m traveling and know I’ll be eating dinner out and putting it on my business account. For that, I’ll need my business card. But again, that fits into the buying category, not the spending category. So go ahead and alter it a little to fit your needs. But if you can first separate your expenses into those categories, you’ll start to realize what you’re spending and what you could be saving, more importantly. I’m doing it! Join me!?

The post This Week, Try a Spending Cleanse appeared first on Career Girl Network.