Tightening the Financial Belt

I have been completely avoiding looking at my Vanguard account because I knew that my stocks must be down. I invest mainly in index funds, so I've been positive they would be down, down, down... I finally logged in to check on them and sure enough, they're so low that it's almost enough to make my stomach turn! I haven't stopped my regular contributions though. I'm gonna struggle through the emotional side and just keep plugging away at it. It did really help me resolve to buckle down on cutting my spending.

Which brings me to the next big thing that I've put off and off... trying to make a budget! Or I should say: MAKING a budget. I guess the even tougher part will be STICKING to it.

That is one of my goals this weekend. To figure out how much I am spending on the essentials and then how much I want to spend. I'm dedicated to eating food out of my pantry and freezer though, so that should get me through a lot of December. I have a lot of food in there!

I am pretty certain that my biggest expenditures are traveling (one of the downfalls of having a long-distance boyfriend) and eating out (foodie friends will kill you in that department!). So, I'm going to institute the Envelope System for the eating out and maybe groceries. I have no idea how much I actually spend on going out to eat each month, but should I be spending more than $200? I think not, so I'm gonna stick $200 in an envelope and every time I eat out, I'll take it out of the envelope. If I run out of money, I won't go out to eat. Luckily, so far, I only have two times this month that I KNOW I'm going out. I may adjust this amount if I come up with some data while making the budget that makes sense.

How much to budget for groceries? I'm a single woman who entertains often... $150 a month? Hmmm... that's a toughie. Maybe research is required on that one. I guess I could try $150 a month and see how it goes. December has the danger of being more expensive with New Year's and Christmas dinner thrown in there. Meat's expensive!

As far as traveling goes, most of my traveling can be broken down into: going to see Greg and gaming conventions. Gulf Games is coming up in February and I really don't want to miss it. I have a roommate lined up and maybe I could use a free ticket I got from United for being bumped on my white water rafting trip. That would make it more affordable for sure! *sigh*

OK - I can do this. Deep breaths...

Rollover 401(k)

I rolled over my 401(k) to Vanguard in July. It was super easy to do, but earlier this week, I finally sat down and figured out what I wanted to invest my money in. When I did the transfer, it defaulted to a prime money market fund, which is basically a cash/savings account at 2%. I put a chunk of it in the Vanguard 500 index fund based on this recommendation, but then split some of it out into other index funds. I moved about 20% of it over and I'm going to set-up an automatic exchange every week or two to make it move money over so I can do some dollar-cost averaging. Although, I'm wondering if I do it over such a short period (six months to a year), if it will really matter or not?

When I get home, I do want to start looking at my finances a bit more to see if I can save more money. The longer I date Greg, the more I start thinking that not working (or cutting back) after having kids is a real possibility, so I want to save up as much as possible to prep for that! It's a ways off I'm sure, but saving early is always a good idea!

Vanguard is still awesome

I originally opened up my Roth IRA account with Vanguard in mid-2002. In September 2006, I opened up an investment account with them. Both times I was very happy with how easy it is to open an account and how easy it is to get a customer service rep on the phone to help with questions.

So naturally, when I decided to rollover my 401(k) account that I have at my old company, I chose to roll it over into Vanguard. They have a very easy-to-find phone number on their website and I was promptly connected to a live person who helped me set-up an account online. It took all of about five minutes.

I wish all companies were like Vanguard. They really make everything SO easy! I highly recommend them!

Vanguard account opened!

After much contemplation, I finally opened up a Vanguard account today for investing purposes. It was hard to decide to do it, especially after receiving an email from my credit union that let me know about a 7 month CD that pays 5.6% APY. 5.6% guaranteed vs. trying to do better with a Vanguard account? Well, I did say that I wanted to gamble more in my life, right? So here goes!

I put an equal amount of money in the following seven index funds:

• Total stock market index
• Small-cap index
• Value index
• Mid-cap value index
• Small-cap value index
• European stock market index
• REIT

Other than this, I'm going to keep a reasonable amount in my EmigrantDirect account for easy access and put the rest in that 7 month CD at Lockheed.

We'll see how things progress!