I did a quick financial review of 2011. My net worth is up by about $13,600. My liabilities (mortgage) only went down slightly, but we should do better in 2012 since we will be paying extra on our mortgage every month – enough to make a full two extra payments. Extra income helped – made $2500 between the various odds and ends we do to make a little extra. That was much more than I expected. We probably will not hit that figure in 2012 since my work load at church will be heavier and I will have to scale back my time in other areas. Our savings toward a replacement vehicle went well, and we are slowly (and I do mean slowly!) building up our emergency fund.

I broke about even (slightly ahead) on my retirement savings- what a crazy year for investing. Basically what I put in is what I got this year. Hopefully things will settle down and I can start getting some good returns from my investments.

All and all not a bad year financially. One of the areas we want to focus on in 2012 is building up our emergency fund. After it took some big hits in 2010 we just have not been able to put away as much as we would like. Hopefully that can change in 2012.

How did you do in 2011? Any surprises?

 

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ING Direct had a “Black Friday” Sale that I took advantage of – in fact it was my only Black Friday “purchase”. ING had several ways to earn money if you opened a new account, one of which was for opening a children’s account. I had been thinking about opening an online account for my girls anyway, so I took advantage of the offer.

It was really easy to open the account (took only about a minute for each child), there was no minimum amount to deposit, and for my trouble each of my girls earned $27 for their account! The bonus money will be accessible in 30 days (if we keep the account open for 30 days, which we will).

So instead of spending money on Black Friday, I earned some for my girls – and became a hero!

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Over at MSN Money, Knight Kiplinger of Kiplinger Magazine has a video where he lists his eight essential lessons of financial security. His list of 8, with my comments, are:

1. Invest in Yourself. This is about education and job skills. You are your greatest asset. Invest in yourself and then you will have the means to invest in other things.
2. Protect Yourself and Your Loved Ones. This is about insurance. I am not one to over insure, but I do believe that some types of insurance are necessary. This is something that needs to be reviewed annually in your life to see if you are covered adequately.
3. Borrow Sparingly. Yes, Yes, and Yes! He believes you should only borrow for things that are of lasting value. He then lists three things which it might be okay to borrow for: houses, education, and maybe a car. I would say that except for the house, you probably should not borrow at all, and then for the house, be careful. You can work while you are getting an education, and you can buy cheap cars and save. But yes, borrow sparingly and only if you have to.
4. Pay Yourself First. If you wait until all the bills are paid, you will never have anything left over to save, so save first then pay the bills. He includes investing (stocks and bonds), but I would not do that until you have completely saved up an emergency fund and have paid off all debt.
5. Don’t Go For the Home Run. His thoughts are to stay away from market timing, taking huge risks. Just be diligent and work for the long haul, not the quick fix. Slow and steady will win the race!
6. Diversify, Diversify, Diversify. Do not put all your eggs in one basket. Your portfolio should have mixed assets in it so that if one tanks, the others can hold you up.
7. Live Simply Today for a more Comfortable Tomorrow. Delayed gratification! Learn to say no now. To many people are spending their future away.
8. Give Generously to Others. When you have applied the first seven, then you can do number 8! We need to share what we have been blessed with.

 Overall I thought it was a good list. Most of it should not surprise regular readers, but it’s good to be reminded.

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My wife and I do a few things to bring in a little extra income. I write a blog and do surveys – both of which fit since my work schedule as a pastor is so unpredictable. I can do either of them whenever I have a few spare moments. My wife, in addition to being a wonderful homemaker, does home school evaluations for others (required in our state).

Between the two of us I had hoped we could bring in  $1200 extra this year, an average of about $100 a month. For the first three months of this year, we brought in $540! I don’t expect that trend to continue, but it sure is a nice start.

As I mentioned in an earlier post, we don’t budget this money, it is just our fun money. However, starting this month we will start taking some of the money and put 10% each toward emergency fund, extra mortgage principal payment, and charity.

It’s nice to be able to bring in a little extra money while working from home at our convenience. This fun money allows us to go out to eat, buy DVD’s, and spend on our hobbies of gardening and scrapbooking.

What do you do to earn a little cash?

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Every month I check my net worth to see how I am doing. Now, I don’t get worried if it’s down a little, I am looking more for month to month trends, mainly to see if am I going in the right direction. But each year I do a year end review to see how we did and if my net worth improved (which it should have!). The good news is that my net worth for 2010 was up over 16% compared to 2009! Now part of that good news was because stocks finally lifted (actually took off in some cases!). So I was very pleased.

Another thing I take a look at is my savings rate. Right now I am saving at a clip of 16%. Not bad, but I am hoping to do even better in the future. My ultimate goal would be to be putting aside 20%, so I have a little ways to go. But for right now 16% isn’t too bad.

Now if I could just put some extra toward our mortgage and pay it off early that would be great. But until we replenish our emergency fund that will have to wait. But overall, we are going in the right direction. It might be slow and steady, but that’s what wins the race, right?!

Hi there - could you help spread the word about A Penny Saved? We rely on word of mouth to get new readers. If you would send someone a link, email, or even mention it to your friends, I would truly appreciate it. Net Worth is up! is a post from: A Penny Saved, the best darn personal finance blog around.

As part of my work at church I do financial counseling and help with benevolence assistance to those in need. Because of this, I went to a seminar that was held for community leaders that work with the poor and disadvantaged. It was a very informative two hour seminar.

One of the things that really struck me is how people think – especially how the poor think different than the middle class, and how they both think different than those who are wealthy. For example, in the area of food, what a poor person values the most in food is quantity. A middle class person values quality the most when it comes to food. And a wealthy person values the presentation the most when it comes to food. One area of life, three entirely different views. In this seminar they discussed over twelve different areas that the classes view differently and how they approach them.

It got me to thinking – in what ways do I think “poor”? What ways do I think “Middle-class”? What ways do I think “wealthy”? Are there areas in my life that I need to adjust my thinking (and actions)?

One area that I need to work on is connections. Poor people view friends for entertainment and fun only. But Middle class people value achievement, whereas wealthy people look for connections. I need to establish more connections with others and not be such a go it alone person (a middle class trait).

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I was printing out some Quicken reports – some to get ready to do my taxes, some just for fun and curiosity. The one report I did was on income earned last year through various sources. Between my wife and I, we were able to earn $2300 in extra income last year! That really helped us as we had so many medical and house expenses last year.

The income came from a variety of sources:

• Doing Online Surveys
• Performing Funerals / Guest Preaching
• Blogging
• Selling an Old Car (to junk yard) & selling Jewelry
• Home School Evaluations (my wife is a former teacher)

Obviously not everyone can do some of these. But usually most anyone can do something to make some extra cash. I have friends who use their hobbies (like gardening or photography) to make money. Who use their skills to earn some extra cash (small house projects for others).

What are some ways you could make some extra cash this year to pay down bills or build up an emergency fund? Get creative and get started!

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We had our 4th Dave Ramsey video session last night (13 sessions total). The attendance is 64 people and they are pretty faithful in coming every week.

Last night’s video on debt was the best in the series so far. At 100 minutes long, I was worried that it would be tedious and boring – wrong! If nothing else, Dave Ramsey is a great communicator and motivator. I can’t say that there was anything new in what he said about debt, but the way he packages the information and the intensity in which he delivers it makes it memorable and I believe helps individuals change their habits.

I have been budgeting for 26 years, have for the most part stayed out of debt except for a mortgage (once or twice in my early years I had a little debt that was paid off rather quickly – in about a year). But after last night’s video even I was motivated to do better!

I have been some what nonchalant about our mortgage. Now, my wife and I are motivated to be a little more aggressive in paying it off. It’s a 30 year mortgage, but we would like to see it gone in under 15 years.

So if you get a chance, I would recommend see the video on debt (this session is usually free if someone invites you to the seminar). It really helps motivate you in the right direction to do wealth building by paying off debt as fast as possible and avoiding it in the future.

Hi there - could you help spread the word about A Penny Saved? We rely on word of mouth to get new readers. If you would send someone a link, email, or even mention it to your friends, I would truly appreciate it. Update on Dave Ramsey Seminar is a post from: A Penny Saved, the best darn personal finance blog around.

The other week I received a call from a local Funeral Director asking me if I would perform a funeral for a family that did not have a pastor. I agreed and met with one of the family to work out the service details.

The funeral was for an older person who did not have children, and was only married for a short time before they died. The person had a will, but it was written before they were married. Also, shortly before they died, they changed  executors of the estate. Talk about setting up fireworks for when you pass away! Part of the family was mad because they switched executors. Part of the family was mad that the person married. Then there was confusion because the will was outdated because they had gotten married. So some of the family was scrambling to make sure they “got what was coming to them”.

When I did the funeral, some of the family stayed outside until right before the service started – they didn’t want to speak or see the other part of the family! Fortunately there was no fighting at the funeral, but it was tense. It saddened me that the individuals were more concerned about the estate than about the deceased.

This was a reminder to me and now to you – make sure your will is up to date! And choose your executor wisely. Also it was a reminder to me that if there is something I definitely want to give to someone, if I can give it while I am still alive that is the best – then I know that they will get it!  A final thought that I had was that I want to live in such a way that my family and friends will miss me and not just wish for my money.

Hi there - could you help spread the word about A Penny Saved? We rely on word of mouth to get new readers. If you would send someone a link, email, or even mention it to your friends, I would truly appreciate it. A Funeral to Remember – and a Reminder to update your Will! is a post from: A Penny Saved, the best darn personal finance blog around.

The other day my wife was talking with some of her girlfriends and they were talking about houses. One of them made this comment that just surprised my wife completely. This women said that her family did not own a house (they rent one) because they did not want to pay real estate taxes. My wife couldn’t believe that comment and I know I can’t.

Now there are many good reasons to not own a home and to rent. Depending on particular circumstances, renting may be a financially wise choice. But to make a decision to rent verses buy because you don’t want to pay taxes is not a good reason. It is wrong financial thinking. In the first place – they are paying taxes, albeit not directly. The landlord / owner of the house, his goal is to make money. When they come up with a price for rental, it will include covering the mortgage payments and taxes. So the price of the rental will have those items, among others factored in. Her family is paying the taxes, but on a monthly basis to the landlord verses a lump sum to the city.  

Although I am surprised at thinking like this, I know I shouldn’t be. Everyday people are making wrong financial decisions out of ignorance, foolishness, or just carelessness. I do not want to be one of those people, and if you stopped by today to read this, hopefully that means you also do not want to be one of those people. It was a good reminder for me to keep learning and growing in this area, so that I do not fall into traps that have caught others by surprise. Let’s keep learning together!

Hi there - could you help spread the word about A Penny Saved? We rely on word of mouth to get new readers. If you would send someone a link, email, or even mention it to your friends, I would truly appreciate it. Wrong Financial Thinking is a post from: A Penny Saved, the best darn personal finance blog around.