Craig Clayton

Saving Money 101

September 4th, 2007

Over the last few weeks, I’ve had several people say things about me that have really pissed me off.

No, no, no, they didnt make fun of my hair.

Mind you, none of these comments were said to my face - they were completely third party. Thank God I have good friends who snitch on these asshats. What did these snide remarks entertain? My lifestyle and my income! Evidently, I blow A LOT of money. I spend money on things I don’t need, I am completely wasteful. I live like I make a million dollars a year — this goes on and on…

Before I go into the details, I want to tell you a few things about me:

• I am a hard worker.
• I am not a 9 to 5′er nor do I have that mentality.
• I am very fortunate to have been lucky and find a job I enjoy that pays well.
• I have zero credit card debt - paid off monthly.
• I have had several side projects and currently am only working on one major site.

That being said, I’m going to disclose a few of my savings plans and thoughts to

• (a) show that I am not blowing cash like its cocaine and
• (b) encourage my readers to adopt saving strategies.

I’d suggest anyone who doesn’t have a budget or have any idea of how much money they spend to read Dave Ramsey’s book - Financial Peace. I’ve started reading it and cannot put it down. Not because I am eyeballs in debt and freaking out, but because some of the concepts must be learned.

Emergency Fund - The Number one thing!
First off - Let’s talk about what I call the “Emergency Fund” (also in Dave Ramsey’s Books). Like many of you, I didn’t have crap at 22 or 23 for savings. I did make a few wise investments and purchased a condo on the lake. I lived there for two years, sold the place, avoided capital gains tax (2+ years of primary residency), and made a nice chunk of change off of it. What did I do? Well, I blew a bit of it on fun stuff, I put half of it in a savings account, and spent the remaining money on moving to Kansas City.

After a few years of having my money earn about 0.002 percent in this credit union savings account, I moved it to a ING Direct Savings Account earning 4% interest or so. This was a smart move. It’s hard to move money in and out of ING - so its pretty safe, but still a bit liquid. I managed to use (blow, whatever) about ___ bucks on some things (down payment on boat, boat stereo, nice new wakeboard). I realized I had to stop that, so I moved most of it into an ING Mutual Fund where it is currently earning some seriously nice interest. This is my “OMFG I just lost my job, wtf do I do!” money and I will not be touching it until said event occurs. I’ve keep a few bucks in my ING account to gather good interest and save me from things like messed up props, engagement rings, car repairs, and other random shit I have to save for… I dump about $200 dollars POST tax money into this account every month, saving nearly $2,400 a year on it.

My 401K Information
My company matches 6% in our stock - which might be tanking, but its still nice. Guess what, I match the entire 6%. Read This - YOU ARE A RETARD IF YOU DO NOT MAX OUT THE MATCH. This is FREE money. Seriously, take it. I’ve thrown an extra 4% of my salary at a few other funds in my 401k. Why? First off, I’m getting this stuff Pre-Tax, so it drops my taxable income.

Oh no Craig, stop, you are sounding like an investor…

Seriously, I thought that extra 4% would kill me — How much fun am I going to be missing out on? Well, with the savings from FICA taxation, etc, it costs me hardly anything. I don’t even notice it at all! In fact, I’m bumping it way up. You can contribute up to $15,500 for the 2007 tax year. I think it bumps up $500 a year for inflation, the limit will probably be $16k in 2008. This is a quick way to save for retirement that doesn’t hurt you as bad.

Craig, what about your Roth IRA? I’ll be honest, I dont have one - but that doesn’t mean I shouldn’t. I will probably get one through vanguard, ing, or fidelity. You can contribute up to $5,000 dollars into these bad boys a year (post tax money). Not a bad savings vehicle! I’ll let you know when I do this. I should probably dump about a $100 bucks a month in one of these to start out.

The Health Savings Account - or account previously known as the MSA
I have a High Deductible Health Plan and an HSA. I put about $100 bucks a pay period in this, so roughly 3k a year. Right now I’m earning a decent interest rate (1.588%) - but soon I’ll be able to put my money into mutual funds (peg balances vary per institution) A peg balance means you have to leave $x amount in the HSA, but anything over can be “swept” into a Money Market account.

I’ve been to the doctor twice this year - once for being sick and once for contact lenses. I paid with a credit card and “reimbursed” myself for the cost of those expenses when I needed it.

A Health Savings Account - © It’s a good thing! I’d suggest you get a HDHP and HSA from First Horizon Msaver, especially if you are uninsured!

That’s my savings plans… Any other good ideas? Now, back to burning my cash…

Entry Filed under: Daily Grind, Political