Keep Your Longer-Term Goals In Mind

Tip #222 - Keep Your Longer-Term Goals In Mind. In last week's post on setting financial goals, I wrote it in anticipation of setting up a budget for the coming year. Therefore I suggested coming up with financial goals for the next year. But these goals are only short-term goals. And we need to keep our short-term goals in context with our long-term goals, and our mid-term financial goals.

So why is your goal is to save $10,000 this year for retirement? How did you come up with that number? Suppose your goal was to save $5,000 last year for retirement and $10,000 for next year? Where is this accumulation of funds leading to? What are your long-term goals with respect to retirement?

You can think of your long-term goals as your goals 10 years from now or more. If you are 35 years old and your goal is to retire when you are 50, then you have 15 years until retirement. Perhaps you have calculated how much you need to save each year to get to the "magic" number you want in retirement. Or maybe you are just saving as much as you can. Or maybe you don't know why you are saving the amount you are. But you should know why. Your short-term goals should fit in with your long-range plans. If long-term plan is to have $1 million in retirement, and retirement is only 15 years away, you would need to save a lot more than $10,000 to reach your goal. Of course this isn't just about retirement. You might have some mid-range goals as well - goals for maybe 2 to 10 years from now. Perhaps your goal is to buy a house in 8 years or save for your daughter's college in 5 years. Regardless of what your long- and mid-term goals are, your short term goals should be the first step toward reaching them.

So when work on your savings this year, keep in mind how this savings amount will be combined with past and future savings to meet your longer-term financial goals.

In Real Life (IRL) - I realize that sometimes we work backwards in things. This post probably should have come before the one I wrote about setting your financial goals. But sometimes we work backwards rather than forward when it comes to money. So while I was trying to be forward thinking by writing about setting this year's financial goals before doing your budget, I should have been even more forward thinking and asked you to do an exercise of what your longer-term financial goals are before coming up with your short-term ones. In theory, it makes more sense that way. In reality, many of us are just trying to save as much as we can on a yearly basis, regardless of what our long- and mid-term goals are.

I will admit that while I have come up with our long-term financial goals as well as the approximate amount we might need for them:
--retire when my husband and I are 60 years old
--save 100% of my children's undergraduate degree (state school or equivalent)

I have not yet calculated our costs associated with our mid-term goals:
--save for braces
--save for two new cars
--save for a Bat-Mitzvah

We just haven't done much with our mid-term goals, concentrating instead on our retirement and the children's college funds. Although I do know they are there in the back of my mind. And, I hope that once I start a part-time job that we will incorporate some of our yearly savings towards these goals. What are your long and mid-term financial goals and how are you starting to save for them?

Set Your Financial Goals For 2010

Tip #220 - Set Your Financial Goals for 2010. At the end of last year, I suggested you review your financial goals from 2009 to see how well you did achieving them. Well, now that it is the beginning of a new year, it is time to set some new financial goals. The first rule of setting a financial goal, or any goal for that matter, is for it to be realistic. My goal could be to earn $300,000 this year, but that's not going to happen, so there's no reason to set a goal that will not be met. Your financial goals should be in line with your income, and it goes hand in hand with creating your budget which we will discuss in the next post.

So first think up, and then write down your financial goals. They can be adjusted and tweeked in the next day or two when you write up your budget. Your financial goals can include how much you want to save up this year. The savings could and should be further broken down into categories - savings for retirement, savings for a new car, savings for college, etc. The more specific the goal, the easier it is to achieve. Your goal can include the income levels that you want to meet in these jobs. Maybe you owe money for a credit card, student loan, or a car. Your goals could include how much you want to pay off on those loans or how much extra you want to pay each month above the minimum.

The goals could include how much you want to earn this year. If you have a salaried job, this might not be plausible. But perhaps you run a side business making hairbows or selling on eBay. Or maybe you have a job where you are allowed to put in overtime. Your fianancial goals could also include how you want to manage your money. Do you want to only pay cash in the upcoming year? Do you want to pay off your credit card each month? Perhaps you want to keep money in envelopes for each budget category.

Spend a few hours or a day thinking about what you want to achieve financially in the coming year. Start writing down these goals and then in the next day or two you should write up a budget that covers your expenses. Your budget may show that some of your goals are not realistic and you may need to adjust them. Or, on the other hand, your budget might show a lot of extra fluff that can be taken out, and you can raise your goals. We will talk about budgets in the next post. In the meantime, think about your goals and get them written down.

In Real Life (IRL) - I reviewed our 2009 financial goals a couple of weeks ago. Most of the goals we were able to meet - putting $2,000 into each of our children's education funds, putting the full amount allowed at my husband's company into his 401(k), and paying down our mortgage on our condo in Florida. Other goals we were not. We were hopeful to put $5000 each into a Roth IRA for both me and my husband. We fell a few thousand short on that front. We also didn't allow for enough money to be spent on gifts and unplanned expenses.

Over the past few days I have thought about our financial goals for 2010. Many of them remain the same. We plan to put $2,000 into each of our children's education accounts. We are fully funding my husband's 401(k), and we hope to put $5,000 into each of our Roth IRAs. We also hope to catch up on our 2009 Roth IRA shortfall. We have until April 15, 2010 to do so. We are on track to pay off our condo's mortgage by year-end, so that is a continued goal that is being carried over from last year.

Another goal of mine is to increase my income by taking a part-time job. I worked full-time before I had children and went part-time after that until my third child was born when I stopped working altogether other than selling on eBay, which brings in minimal income. Since my youngest will be turning 3 this summer (how can that be?), I am going to try to work part-time while he goes to preschool a few days per week. We haven't written our our formal budget yet, but we are expecting our expenses to go up in the next few years - a Bat Mitzvah to save for, a new minivan to save for, and more frequent Hebrew lessons. A part-time job would be able to cover these expenses.

My husband and I will be writing up our formal budget over the next few days (after we unpack!), so some of these goals may need to be tweaked. In the meantime, this is what we hope to accomplish financially in 2010.

Follow Through With Your Savings Plans

Saving Money Tip #208 - Follow Through With Your Savings Plans. In one of the first Seinfeld episodes, Jerry’s friend Kramer is staying at Jerry’s apartment when it gets burglarized. Jerry and his friends cannot understand how someone could have broken in because Jerry has about 18 dozen locks on his door including the super foolproof Kryptonite lock (or something like that). But finally Jerry puts two and two together and figures out that the reason the locks didn't work was because Kramer didn’t close the door. Duh, all of the best locks in the world won't work unless we follow through and close the door.

And like the closing the door so the locks can work, we need to follow-through on our savings plans for them to work. We can have them all written out on paper so they look great. We can buy the savings envelopes to use for our budget categories. We can have the spreadsheet written up with how much we’re going to spend (and save). And we can have the best ideas in the world for income and keeping money in our own pockets, but unless we follow through with these plans, they won’t work.

We need to actually need to use the envelopes for our budget categories (if that’s our plan) and we actually have to follow our goals such as bring lunch everyday to work, and it’s imperative that we use the coupons that we cut out. Otherwise, all of our planning and ideas are just a waste of time.

Yes, this advice sounds cliché, and it is. But the reason sayings become clichés is because they are usually true. How many things do you have on your “to do” list in order to save money or make money that you haven’t gotten around to? Is one of your goals to make more money by getting a seasonal job? Then why haven’t you filled out the employment applications yet? Did you plan to only eat out once a week by having meals prepared in advance and at the ready when you get home from work? Then start cooking! Did you hope to curb spending by not shopping on the weekend? Then make plans for other, cheaper activities.

Sometimes we all have grandiose plans, but until we follow through with them, they won’t work. Take the first step and look at your plans. Organize stuff for a garage sale; make some meals; cut some coupons; apply for a job; send money away to a mutual fund account. None of your savings goals will come to fruition unless you follow through. Oh, and don’t forget to lock the door on the way out.

In Real Life (IRL) – I am as guilty as the rest of the crowd of putting off things that I need to do or not following up with some of my plans. But two events stuck out this weekend that made me think of this topic for a blog post today. First, I was checking our credit card statement when I saw a charge for $300 from a few days earlier. Thinking my husband had some work done on the car that he mentioned being needed, I asked him about it. “Oh, that’s the new lawnmower I bought,” he replied. I was shocked because although I knew our lawnmower had just died, I didn’t realize that he had gone out and bought a new one. I will admit that I am the more frugal, money saving half in our couple, and I had talked to my husband about discussing any purchases over $50 before they were bought. In addition, when I intend to make a large purchase, I like to research which one I want to buy and then find the best price. My “gotta have it yesterday” husband does things differently. He’ll check out a few stores and pick out what he likes best. We had a similar situation happen last year over a vacuum and he assured me he would consult me with future purchases so I can do research first. But he didn’t. So that’s one thing on our financial plan that we did not follow through with. Maybe we would have saved $50 or maybe we would have gotten a better lawn mower for the same price. I’ll never know. What I do know is that had we followed our laid-out plan, we’d probably be slightly better off financially.

The second thing that happened this weekend was I finally got around to listing some items on Craigslist and eBay. My written down goal at the beginning of the year was to list five items per week on eBay or similar site. And when I follow that goal, I make some decent extra money. But I will fully admit that I have been lazy lately. I bought some items that I knew I could make money on, but they were just laying around the house. I had something to list on Craigslist from our dog who died back in April. It was just taking up room in our garage. Other than pure laziness, I had no excuse not to be following through on this income-earning goal of mine. I finally got around to listing a few items at the end of last week and have already sold two and have bids on the third item. I will admit that selling some items provides motivation to sell more. So hopefully I will continue to list things.

Both of these events sparked the idea in my head for this post. If we are not following through with our plans and goals, then the outcome we want won’t happen. Just like buying the best locks in the world won’t keep the burglars away if we don't close the door. Look at your goals for saving money and then figure out which ones you have not done. Then work hard on doing what you set out to do. Follow-through is the only way to meet your goals.

You Don't Need To Become a Millionaire

Tip #190 - You Don’t Need To Become A Millionaire. Many of us have grown up in a society where the measure of success is to be “the best.” We strive to get the best grades, to be the best athletes, wear the best clothes, live in the best houses, etc. But are those people who have achieved “the best” are always the happiest? Is the person who is the smartest in school also the happiest? Is the one who lives in the biggest house happier than those who live in smaller ones? My guess would be no.

While it certainly would make ones life easier if he didn’t have to worry about where the next few dollars are coming from to pay for his electric bill, living in the biggest house in town does not guarantee happiness. So why is it that many of us want to try to become a millionaire? Are we trying to prove something? Have we been programmed that the only way we will be considered successful is if we are rich? Perhaps.

But let’s be realistic about our goals. Each person’s goals should be individual to him or her. While one person might work long and hard hours so one day he can build a large home on acres of land and own a yacht; another may be happiest living in a cozy cape cod and not having to work 60 hours per week. If we are making $50,000 per year on the East Coast, we probably won’t be the richest in town or living in the biggest home. But we can still strive to live comfortably and be able to pay all of our bills in a timely manner. That really is the whole point of this blog. It is not to become “rich” or have the most money or have more money than your neighbor. It is to utilize efficiently what you are making, to learn the basics of money management, and improve your financial situation if you are struggling. Not everyone wants or needs to be a millionaire.

In Real Life (IRL) – I admit that the word “millionaire” has a nice ring to it. Back in the day, a millionaire was really something – the ultra rich. Today, not so much. Having a million dollars net worth might mean you live in a small $600,000 home on the East Coast and have a decent amount for retirement. It doesn’t mean you are hanging out with the Vanderbilts and Astors. But still, there is just something about having a million dollars that sounds so rich. Anyway, my goal is not to become a millionaire, but it is to be able to retire around the age of 60, to fully pay for my children’s college education, and to have our house paid off before we retire. And if we can live decently in the interim that would be our objective, too.

I think sometimes we get caught up in what society thinks is important or what we see on home and garden-type tv shows or what friends are doing, that we lose sight of what will make us happy. Personally, I would not be happy if I had to join a country club to fit in with my husband’s business partners. Nor would I be happy if we lived in a town where my children’s classmates are traveling to Europe every spring break and we felt like we needed to keep up. There is no reason for us to try to reach the “millionaire” status. It would not make us happier and it is not in line with our goals.

So let’s all be realistic about our financial goals –whether it is to buy your first home, raise enough money to put your son through college, or to buy a cottage by the sea, not all of us need to strive to be millionaires.

Take Baby Steps

Saving Money Tip #188 - Take Baby Steps To a Better Financial Future. In our quest to become millionaires or at least to get out of debt, it is often the case that we want to reach our goals yesterday. But that is just not possible. Getting out of debt, building up your savings, and learning about finances take time – lots of time. That’s why it’s important to set goals. When you have written goals and a plan, you can be realistic about how long it will take to pay off that $6,000 credit car bill or how long it will take to save $50,000 for a down payment for a house. Since most of us will not win the lottery to help us reach our financial goals, we need to learn how to achieve them slowly.

If you want to cut back your grocery bill by cooking more and eating out less then start out buying some prepared food from the grocery store or frozen meals that are costlier than cooking yourself but cheaper than a restaurant. When you’ve gotten used to eating at home, start trying to cook semi-homemade meals with ingredients that are a mix of convenience foods and basic ingredients. Then try cooking from scratch using just raw ingredients. Then you can look into cooking in bulk and freezing for future meals. You are not going to go from eating out 3 days a week to cooking from scratch in a week’s time. There is a learning curve to learning how to be able to cook your meals from scratch and to stop relying on restaurant meals. Take it slowly.

The same principle applies to saving money. You will not save $10,000 overnight. If you make $40,000 per year, set a goal to save $300 per month. After one year’s time, you will have $3,600 saved. After three years, you will have your $10,000 and then some. Building up your savings account will generally not be quick. Be patient.

If you want to start putting some of your savings in high-earning investments, then it is a good idea to learn about the different types of investments that are available and what its risks are. Investing in a “sure thing” or a “hot” stock is not a good idea unless you have done your research. Learn about the different investment types. Start out by learning why your money may not keep up with inflation if all of it is in a savings account at the bank. Then learn what a mutual fund is and how it can benefit you. Then move on to stocks and what the risks are with investing in them.

You will not become a millionaire overnight. You will not get out of debt overnight. You will not learn how to be a great stock picker overnight. But taking the time and having patience to cut back, learn, and put away money by starting out with baby steps and building up from there will get you where you want to go.

In Real Life (IRL) – I have always been one who looks toward the future. When I was young, if my dad gave me $20, I usually put it away in the bank to spend it sometime in the coming months or years rather than that day. I don’t know what makes me that way. I just am. I know for others it’s not so easy. However, this formula of taking baby steps really does work. I took baby steps building up my savings. I used to save my allowance. Then when I had a job at summer camps, or McDonalds or as office help, I always put away part of my paychecks for the future. When I got my first “real” job out of college, I started putting away a couple of hundred dollars per month toward a mutual fund. It wasn’t much. And I’m sure friends of mine spent the same amount of money on beer, or a car payment, or going out per month. But after 10 years, that little bit of money built up to thousands of dollars – enough to put a substantial down payment on a home in a nice neighborhood. Did I do something special to buy a home in a nice neighborhood? Did I inherit the wealth or suddenly come into money? No, it took years and years of savings to get to the point where I could afford one. As far as buying real estate, it wasn’t until I has bought my own home that I considered looking into buying a home for investment or vacation. I was able to build on what I had learned in the home-buying process that I was willing to take the risk and buy an investment property. Same thing with stocks. I was never comfortable buying stocks on my own, so I joined an investment club where the risks were less and I was able to learn more about stocks over a period of several years. Once I had that experience under my belt, I was comfortable enough to buy on my own.

As far as being able to live frugally, I am learning in that area all the time. Learning how to garden is a great way to cut down on expenses on food. But it takes time to learn that skill. We have started slowly on a home garden in our yard. And each year we’ve been adding to it. I can’t expect to be an experienced farmer overnight but we’re learning.

I know that most of us when we finally put our mind to something we want to make our changes instantly or reach our goals right now. But that is just not feasible. Taking baby steps is really the only way to reach your financial goals – whatever they may be.

Man Plans, G-d Laughs

Tip #62 - Realize That Man Plans And G-d Laughs. This is a favorite savying of mine because there is a lot of truth to it. Now this is not a religious blog by any stretch of the imagination. So if you don't believe in G-d, substitute whatever it is that you do or don't believe in. The point is that no matter how much you plan your financial life (or your life in general, for that matter), things will happen beyond your control that even an emergency fund won't cover. Companies close, twins are born, couples get divorced. People get sick, houses burn down, spouses get relocated.

I'm not saying that you should not have an emergency fund for these types of events. You absolutely should. You should save about 3-6 months' worth of expenses to cover changes you don't expect - a job layoff, a broken leg, a car accident, or a flooded laundry room . But what I am saying is that your lives may still change completely even if six months' worth of expenses are covered. If you hoped to go back to work 6 months after having a baby, and you find out you are having twins, it may not be worth it to you to return to work when you realize that the cost of two in daycare isn't covered by your paycheck. And suddenly the life you have for the next few years may be entirely different than what you had planned. Or your spouse finds out that he has a job transfer and you are quickly trying to sell your house, find a another one and look for a job in a new town. Or a family member becomes chronically ill and has to move in with you and you now need to add on to your house, cover extra expenses, and provide nursing care.

You can plan out your life to the finest detail - how much money you will put away each month, what you will be doing in 10 years, and at what age you are going to retire. But sometimes your plans will end up just being plans and what really happens will be your reality. It is important to realize that we are not in full control of our lives. Things will happen around us and to us over which we have no control. So plan your budget, set your financial goals, and prepare for retirement. Also, prepare for the unexpected by creating a fund for emergencies and having a backup plan. And then realize that while you plan, and G-d laughs.*

*In the Jewish religion, we are taught to write out the word G-d with a hyphen, since we are told that we are defacing His name if we write it out completely and then throw away the piece of paper on which it is written.

In Real Life (IRL) - I am a planner by nature, if you haven't guessed that about me already. When I met my husband, we planned to have at least two children -hopefully 2 or 3 years apart. After having saved money all of my working life, I wanted to stay home with my children while they were young. But living in a city with a very high cost of living, I had hoped to go back to work full-time after 5 years, when the youngest was 3 and could go to preschool. That was my plan. I had a bit of trouble getting pregnant, but with the help of some medication, I was able to do so, and I had a daughter 9 months later. Not quite 2 years after my first child was born, it seemed that my plans were falling into place. I found out I was pregnant with child number 2 after taking the same medication as I did the first time. I figured my younger child would start preschool when he was 2 1/2 and I would go back to work.

Then a few weeks later something happened that I hadn't planned. I had a miscarriage. So I went to the doctor's and I was told to try again using the same medication. And we did. And I found out 5 months later that I was pregnant again. So I now figured that my soon-to-be younger child would start preschool about 3 years later and that I would go back to work full-time about 6 months after I had hoped, but not too different from what I had originally planned.

And then I had another miscarriage. And I went to the doctor who told me to go to specialist. And I was given some different medication and told to try again. And we did. And I found out about 6 months later that I was pregnant again. And I told myself the old adage that 'the third time's a charm.' So I planned my life again. I would go back to work when this child was ready for preschool. It would be about a full year later than I originally hoped but we adjusted our plans. And then I had another miscarriage. In addition to mourning all of these losses and wondering if my oldest child would ever have a sibling, I was getting very frustrated with the lack of control I had over my work plans. How many more times could this go on? And how much longer would we wait until I would go back to work full-time?

All through this difficult time, I told my husband that I would like to adopt a child. I had always wanted to do so when I was younger and it seemed like it was the right time to do it. At least we could get on with our lives. After his agreement, we completed months' worth of paperwork to adopt a child from China. I was thrilled to be getting another daughter. I was excited for my older child to become a sister, and I was happy that I finally knew approximately when I would become a mother again because then I could make my plans. I wasn't entirely sure of when the adoption would take place and I didn't know exactly how old the baby would be. But I could estimate fairly accurately when I would go back to work again.

Our child came to us 14 months after started the paperwork. And she was a bit younger than we expected. She would turn 3 a little more than 2 years after we adopted her. I was thrilled -with my new baby, with our complete family and with the fact that I could now plan my life. I made my plans - when I would go back to work, how our budget would look in a few years, when we could take vacations, when the girls would be in college and when we could retire.

And a funny thing happened while I planned. G-d laughed. And He laughed loudly this time. Nine months after we brought our daughter home from China, I found out I was pregnant. With no medication. And I was 39 years old. Nine months later our son was born. And here I sit at home with my 18-month old, while my oldest is in first grade and my middle child is in prechool. And I still haven't gone back to work full-time. Yes, man plans and G-d laughs. And this time, I laughed with Him.

PS. I hope to go back to work in a year and a half. But I'm not making any definite plans.

Set Financial Goals

Tip #48 - Set Financial Goals - Now that we have a new year ahead of us, it is time to set up financial goals. To go hand and hand with writing up a budget, write down a list of what you want to accomplish in the upcoming year. These goals can might include saving $100 per month toward retirement. Or your list might have on it to pay off your last credit card. And it might list goals such as keeping your grocery budget down to $400 per month or to put away $25 per month for your child's education. Whatever your goals are, write them down.

Some people in the financial world would probably advise keeping your goals to be purely financial. But I like to put on there how you will accomplish these goals. For example, if your goal is to keep your grocery budget down to $400 per month, you might have listed beside it that says you will be cooking dinner from scratch 3 times per week instread of buying ready-made dinners. If your goal is to have a clothing budget of $50 per month, you might list corresponding goals of shopping for clothes at thrift stores or only buying your clothes at discount places.

After you write out your list of what you want to accomplish this year, then you can write up your budget to meet these goals. The budget will organize your goals into clear, financial terms. If you are going to cut out your daily coffee, then you don't need a line item in your budget for your coffee fix. If you want to pay off your last credit card bill, then you need to figure out how much you need to put in the budget each month to pay it off. If you can't get your budget and your goals to line up, then you will need to adjust one of them. If your budget shows that you only can put $50 per month toward retirement versus the $100 you had hoped, then you need to either cut something else out of your budget or adjust your goals for this year to save only $50 per month toward retirement.

After you finish this year's budget, then you can start another sheet of paper with long-term financial goals - perhaps goals over the next 3 to 5 years. So while you can only save $50 this year toward retirement, your long-term goal might be to save $100 per month. Then write it down in your 3-5 year plan. Remember, once your debts are paid off in the short-term (hopefully), then you will have more money available to you to start saving in the long-term. It's always good to think ahead to what expenses you will have in the future and what you want to accomplish.

In Real Life (IRL) - We haven't done our yearly budget yet, mostly because my husband hasn't gotten his review and raise yet for this year. Usually he gets it in December, but there has been some management changes in his place of employment and they haven't come out yet - if they are coming out at all. Once we find out for sure if and what his raise is, we will write out our yearly budget. I don't actually expect it to be all that different from last year's except for some minor tweaking. In the meantime, we have made up a list of our financial goals for this year. Our two main goals haven't changed for the last few years:
--Put the maximum into our retirement IRAs ($5,000 per adult)
--Put the maximum into our children's education ESAs ($2,000 each)
I've also added:
--Cutting our grocery budget down to $400 per month from $500 - hope to continue cooking more from scratch. I'd like to start baking my own bread. I want to go full-steam ahead with buying in bulk when I see a great price on things we use.
--I want to keep our children's summer activity costs at $1,000 total.

In the long term-
--I might look into going back to work (15 hours per week) in September. In which case will have extra income for 4 months. This extra income will go towards a savings fund for extra expenses we expect over the next few years such as braces and religious education.

--Next year in the fall, I expect to work even longer hours (24 hours per week) when my youngest is old enough to be in school for longer days.

--Pay off mortgage on condo by end of 2010. (We bought a condo with my husband's mother 5 years ago so she could have somewhere to spend the cold winters. She didn't have the money to buy it herself. Also, it's something we can use down the road. We pay off extra each month and our goal is to have it paid off completely by end of 2010.)

What are your financial goals?

Share Your Financial Plans With Your Spouse

Tip #46 - Share Your Financial Plans With Your Spouse or Significant Other. This one can sometimes be tough. Some of us are savers. Some are spenders. Some are spenders who want to become savers. If you are single, then you have it easy. If you are married or living with a significant other then you both need to be on the same page financially. Easier said than done. I know. Trust me. I know.

If both parties are savers and are happy to cut back on extras, then great. If both parties are spenders, this is not good; but until one of them sees the light then there is nothing we can help them with here. If one of you wants to save money and cut back and the other still is spend-happy, then this topic is for you. What do you do if your family has been spending more than you earn? What do you do if you have some debt and you suddenly realize you need to change your ways but your spouse does not? You need to have a talk with your spouse. You cannot tell him/her what your family is going to do because no grown-up likes to be told what to do. But you can present to him or her a plan for your family to get out of debt or to start saving some of your money.

Let's start with your plan of action. First, write down all of your expected sources of income for the year. Then write up a monthly budget. Ideally, this is something you and your spouse would do together. But, if your spouse wants nothing to do with it, then do it yourself. We went over a budget in another post, but we'll summarize it here. Write down your fixed expenses - those you cannot change - such as your mortgage or rent. Write down any credit card or other debts you owe. Write down your utilities - gas, electricity, phone, etc. Write down your food and clothing expenses and your other expenses - vacation, gifts, miscellaneous. And don't forget the line for savings!

When your spouse is in a good mood, tell him/her that you wrote up a budget to see how much you have coming in and how much you have going out. When your spouse sees everything written down, it is hard to argue whether or not there is extra money for unnecessary expenses. It is this extra money that can be the source of problems. This might be money your spouse wants to spend on eating out or tools, or purses. And it's money you want to save toward retirement. Or perhaps your spouse justs wants to spend money freely without seeing how much you really have extra each month. You need to get across that the budget shows you what you have and how much you have to spend. If he or she is still not convinced, suggest following it for two or three months and seeing how it works.

If you have $4,000 coming in each month and your expenses total $3,600, then tell your spouse that there is an extra $400 per month to play with. Suggest splitting it. He/She can spend $200 each month however he/she wants. You can do the same. As someone who wants to save money, you can put it in a savings account or a CD. Or if you have debt, you can start paying it off with your half. You may not be able to change your spouse, but if you can control how much he or she spends, then you are still better off than if he/she is spending uncontrollably.

On top of that, you can still control the portion of the budget that you usually are in charge of. If you are the food shopper, in the house, you can cut back and save there. If you are in charge of buying the cell phones, you can look for a better deal. If you plan the vacations in the family, you can plan a frugal one. If your spouse is in charge of the cable, you may not be able to convince him or her of a better plan. If your spouse buys his/her own clothes, you may not be able to convince him or her to buy used. But do what you can. After two or three months, maybe you can show your spouse that you have $500 emergency money in your savings account or that you have paid off one of your credit cards. Or that your monthly food bill is now $100 less and you are putting it toward a vacation. Maybe your spouse will catch on at that point or maybe not.

If you are in it alone, then do what you can using what you know about budgets. And at least talk with your spouse about what you are doing. Don't berate him or her for his spending because that won't get you anywhere. All you can do is hope that he or she will eventually come around.

In Real Life (IRL) - I have said this many times in this blog. I am a saver. I always have been. I imagine I always will be. My husband, on the other hand, not so much. He likes to spend. He likes to shop. And I don't think he heard about saving until he met me. To be fair, his dad died when he was young, so he didn't have him to teach him. And to be frank, it was usually the dad who did the finances. So I'm not sure his mother knew how to teach him to save.

When we got married 9 years ago, my husband had $20,000 to his name from the sale of his home. And I think he had about $30,000 in a 401K from work. I had $70,000 I had saved that was earmarked for a home. And I had about $100,000 in retirement accounts. We used $70,000 toward a down payment on a home and we put $20,000 aside for money that could be used toward repairs, furniture, etc. Then I told my husband all I knew about saving for retirement. I told him that he should be putting away the maximum allowed by the law toward a retirement IRA, which he did. Then I told him he should be putting away the maximum allowed by the law toward his 401(k), which he did.

I was lucky because my husband trusted my financial advice. I have a degree in finance. I have a dad who taught me about savings. And I have a brother who is a financial planner. So I had some good sources for my information. He, on the other hand, admitted he didn't know much about finances. So all was good. I was in charge of the finances and he was fine with it. At the time, we both made good incomes. I put money away into savings each month. And we could still eat out when we wanted and shop as we wished.

But then I got pregnant and I wanted to stay home with my child. And that is when I wrote up a budget to see how we could live on his income. Fortunately, we could. It just meant eating out less, buying fewer things, taking fewer vacations, etc. My plan was to go back to work part-time after we had our children and become full-time once they got to be school age. It hasn't exactly happened that way so I am still at home. And now our budget is a bit stricter. But I cannot convince my husband to cut back on his shopping habits. I have a food budget of $400 per month. I brought home 20 yogurts that I bought on sale last week for 40 cents each. They were earmarked to be used for school and work lunches. He didn't care and ate them for snacks. Aaah, I screamed. Those are lunches! He goes to work and stops at the market on the way and picks up crab dip and bread. Luxeries in my food budget. Not so much for him. He likes to eat what he eats. And he likes to stop at Home Depot on the way home.

So what did I do? I adjusted the budget. I control the things I can. We eat dinners that I prepare with food I've bought on my food budget. We go on vacations that I plan using skills I've learned about purchasing train tickets and hotel roooms and cheap places to visit. I found cheaper ways to get our Internet, phone, and t.v. But I've added in a line to our budget for his lunches and his little purchases. I cannot control those. And I'm okay with it (just don't tell him!). We're still socking money away into his 401k and our IRAs and our children's college funds. And I will go back to work in the next couple of years. And because I've been a hyper saver, we are actually more than okay with our savings, so it really doesn't matter if my husband eats fancy supermarket food and buys the latest tool once in awhile.

So if your spouse isn't on board with you yet about savings and spending, write up a budget, present it to him or her. And then do what you can.

Dream Big - Work Small

Tip #24 - Dream Big. It is fine to have big dreams. Dreams that one day you will own your home. Dreams that one day you will have a boat. Dreams that one day you will retire without worrying about money. It is good to have dreams. Dreams are goals. Goals that you set for yourself in your mind. Don't dream that one day you will win the lottery. That is a fantasy - not a dream.

The way to make your dreams real is to work at it. If you dream to own your home one day, then start saving for it today - even if that savings is one dollar. If you dream for a boat then start saving for it. If you dream about retiring someday then start planning for it. It takes a first step and small steps along the way to make that dream a reality.

In Real Life (IRL) - I dream about retiring early - hopefully when my kids are finished with college. I have started to work on attaining that dream. I've saved money from each paycheck. I've put away money for my kids' college account. And I've worked it that we will be done paying our mortgage before the kids go off to college. By the time they are done school, we should be okay to retire. I didn't do this by winning the lottery. I didn't do this by making a big sale on ebay. And I didn't do this by being handed a trust fund. I started saving when I was young. I bought a house in a good neighborhood and I scrimped on frivolous things like eating out and designer clothes. By working these small steps, I am able to dream big.

Another person had a dream. He dreamed that "...that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character." Martin Luther King's dream came true yesterday. And it was a big dream. It didn't come easily. There were baby steps along the way. But when Barack Obama, an African-American was elected as the President of the United States, Martin Luther King's dream of social justice came true. If his lofty dream can come true, yours can, too. It just takes work.