the bottom line

This past Friday, while en route to my nephew's first football game of the season (go Delsea!), I stopped at a local Wawa to grab some cash. Apparently you can't swipe your debit card at the local ticket stand (it's 2012, people, get on it!).

Anywho, I'm waiting for my cash to dispense, and I happen to look down in the trashcan where everyone throws out their receipts. I'm reminded of a friend who once said he used to write his number on the back of a stranger's ATM receipt with a large balance. This way, the girl would think he's loaded and go out with him. At the time, I thought this was incredibly shallow. It still is, but now I can laugh at it.

In any case, the first receipt I can see has a balance of $12,689.47. My mind? Blown. I'm immediately jealous of that person, even though I have no idea who they are. Then I start thinking about why that number seem so unattainable to me. I can't even envision having that much money, ever, let alone just having it hanging out in my bank account.

Who is this person and what are they doing that I'm not?

April is Financial Literacy Month

Did you know that? I didn't until I was doing research on a different topic for the blog.

Money Management International is sponsering a Financial Literacy Month Challenge as well as guest bloggers on their Blogging for Change website which highlights each days "step". You can enter the Challenge for a chance to win $500 - you know I did!

I'm a bit behind on the steps, so lets kick this baby into overdrive to catch up, shall we?

Step 1: Commit to Change. Done!

Step 2: Assess Your Finanical Situation. I scored 12 points on their quiz, which "reflects a good effort to manage your money effectively. The 30 step plan can help determine changes that can be made to improve your financial well-being."
Step 3: Clearing Out Financial Clutter. I will give myself a pat on the back for being pretty organized; I usually alway toss receipts (except for major household purchases), I print & save our utility bills for one year to compare costs. I'm hit-or-miss on saving credit card statements. Lately, I've just been reviewing them online.We have a big bag of bills I need to get around to shredding then burning in our fire pit. I need to add our paystubs to the pile now that we've received our tax return. The blog post for day 3 lists an interesting tip about carrying three different registers - one for cash, one for your bank/debit card, and one for credit cards. The author also mentions people who struggle with their finances may need to document their spending for longer than a month (ugh!)

Step 4: Set Yourself Up for Success. I would consider myself the Family CFO, meaning I track and pay the majority of our household bills. Again, I'm pretty organized with our paperwork. We're half & half on automated payments- I should probably work towards full automatic payments. I couldn't view the webcast at work though, unfortunately.

Step 5: Get Copies of Your Credit Report. Done - over 40 pages!

Step 6: Clean Up Your Credit Report. Easy-peasy since there were no errors from the three reporting agencies.

Step 7: Make Your Money Count. Using their Income Worksheet Form, I calculated a monthly take home of $2,553.24 (a bit more than my previous estimates due to knocking down my retirement contributions in the short term).
Step 8: Identify Your Starting Point. I calculated my net worth at $1,130.87. Woo-hoo! In the positive! I didn't have the information on the balances in my pension & IRAs so I just estimated some rough numbers based on my last year & a half of contributions. I did not factor in our joint savings because I haven't recently contributed anything to it (whomp whomp)

Step 9: Passing the Debt Test. I answered "yes" to four questions:

Is an increasing percentage of my income going towards debt payments: yes, but that's because I'm riding the debt meteor

Is my savings cushion inadequate or nonexistent: bats- 1, savings account- 0

Are you at or near your credit limits: depends on your interpretation of "near", but I answered yes anyway

If you lost your job would you be under immediate financial strain: hell yes. this scenario gives me nightmares.

The guest blog posts lists "5 Great Reasons to Have Less Debt". They all sounds fabulous.

Step 10: Set Your Priorities. When filling out the worksheet they provided, I could almost place each priority in the "need" catagory, but I decided to be reasonable. The blog tells you to "market to yourself" what your priorities are instead of letting the mass media market to you which I think is a really interesting concept.

Rank 1 (most important): Paying off unsecured debt; Making on-time payments on secure debt; Maintaining a savings account (all ranked as needs)

Rank 2 (semi-important): Buring a car (still more a want than a need), taking a vacation (want), having money for entertainment (want)

Rank 3 (not as important): Saving money for a down-payment on a house. Obviously, we already own a house, so we don't need a D.P. but we should work on increasing our home equity.

Step 11: Set financial goals. They use the acronym SMART:

S - "A smart goal is specific. It pinpoints something you want to change to achieve." (I want to pay off my credit cards before I turn 30.)

M - "A smart goal is measurable. You can measure or count a SMART goal."

A - "A smart goal is achievable. Setting goals too high can lead to frustration." (going to be hard, but achievable)

R - "A smart goal is rewarding. Reaching the goal should be a reward for your hard work."

T - "A smart goal is trackable. Set milestones and schedules for your goals." (first goal: Pay off Card 3 by July at latest)

That brings us up to date on our steps. Are you motivated to take the Challenge now? I'm actually kind of excited about it. I'm definitely a person motivated by challenges/experiences so this is right up my alley.