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Archive for January, 2013

What to do with 401K

January 31st, 2013 at 07:25 am

After I posted yesterday Snafu asked what I considered a "safe" investment for my 401K. About 300K of my 400K 401K (lots of Ks, huh?) is sitting in cash! I pulled everything back to cash about 4 months ago as I worried that the fiscal cliff thing would cause everything to drop. I know that was a BAD move as the stock market has done nothing but increase since then.

Now I am scared to get back in as it seems to me the stock market may be about to go down again. That is the problem. Never pull out because it's tough to know when and how to get back in.

Suzi Orman, who I watch regularly, urges risk averse people like me to go into shorter term municipal bonds. She says interest rates are about to rise so stay in short term bonds only. I know to get the growth though we really need to be partially invested in the stock market, but I only have 10 years until retirement. Also, I lost about 75% in the 90s in the high tech bubble so I am scared.

I actually got to talk with Suzi on her show about two years ago where she urged me to put everything in muni bonds due to my fear. I now wish I had done that. I only put 100K into the 5% bonds. Even with the growth of the market I would feel a lot safer with a fairly guaranteed 5%.

I have also been seeing quite a few documentaries about mutual funds that are really ponzi schemes and the fact that the Securities and Exchange Commission really doesn't do much. It is all frightening. I'm sorry, but if they want us to invest for our retirement, the government should at least have enough oversight to keep us safe from crooks!

Does anyone have any ideas on safer 401K investments? I have lots of leeway in my 401K and can invest in just about anything.

We are Doing this Thing

January 30th, 2013 at 08:45 am

I am happy to report that we have accomplished the following things to far this month:

1) I have stopped going to Ebay! (that was a big one for me)
2) I have started writting down everything I spend and really spending reasonably.
3) Hubby and I have created a monthly budget which will enable us to live on my income and save his salary.

STILL NEED TO:
1) Get our 401Ks invested in safe investments (right now they are sitting in cash).

Beginning February 1 (this Friday) we are starting working the Debt Free Spending Plan. The plan is from a wonderful book I read of the same name. Basically, the book has you create a spending plan for both recurring monthly bills and "Daily Expenses." Then you take each of the daily expense catagories and write them down, one to a page, in a little 3 by 5 book you carry with you.

Then you write down your expense as they are incurred on the applicable page. For instance, on the GROCERY page you write GROCERIES at the top and $400 (our monthly ammount). Then if you go to Walmart and spend $75, you write the date, Walmart and the amount, then subtract it from the $400 leaving you with $325 for the remainder of the month. If you get to the end of one category and overspend by say $10, you have to find another category to take the money from so everything balances. There are lots of other details regarding how to work the plan but those are the basics.

I have been gearing up to start the plan for the past two weeks and already it has resulted in my saving money. For example, I saw something on TV which I was tempted to spend $250 on, when I realized my "allowance" category was only $150 a month, which would take me nearly two months to save, I decided not to purchase the item.

Also, I know I want a weight machine for my birthday which will cost $299 and I have decided to save my $150 a month toward that purchase.

I am excited that we now have a plan! I will keep you posted on how it works.

2013 - So Far So Good!

January 3rd, 2013 at 07:41 am

I know it's only two days into the new year and everyone makes resolutions, but this time feels different.

I have created a new spending plan for us which entails our living off my salary and banking hubbies. To make that work:
1) I am going to take the main "frittering" areas...groceries, restaurants, movies, clothing and create an envelope system so we don't overspend.
2) I am not going to use MY charge card. Hubby will keep one to use in case we need to order something from the internet.
3) I am writing down everything I spend in a small notebook I carry around.
4) I will stay away from Ebay!
5) I will look at all our accounts online more regularly...savings, checking, rental house accounts and 401K accounts.

I have been living in a "financial haze" mostly ignoring all of that and it's time to wake up and take notice.

I am 55 this year with 10 years till official retirement age. This is a manageble countdown to a quite foreseeable endpoint.

To those of you younger folks, I will tell you it DOES eventually come. The more awake you can be in realizing this the better off you will be.

Here's to a great financially responsible 2013!