Today, we're interested in your goals for 2009.
What are you hoping to do with your personal finances in 2009?
Answer the poll below. If you have more to add, leave a comment!
You can select more than one option.
Thankfully, our automated finances force us to put the money away, so we don't have to wait until the end of the month to see what we have left over to contribute.
MSN Money has a new article up, "How to come up with a down payment," that offers 12 ways to save money for house purchase.
- Set up an automatic saving plan.
- Get a gift from your parents, grandparents, other relatives or friends.
- Sell a car, boat, motorcycle, collectibles or other assets.
- Liquidate stocks, mutual funds, savings bonds or other investments.
- Allocate your income tax refund.
- Take a loan from your 401(k) retirement plan and repay yourself with interest.
- Withdraw funds from your 401(k) plan, subject to taxes and penalties.
- Collect on a loan that you made to someone else.
- Get a bonus from your employer.
- Explore homebuyer programs for public servants if you qualify.
- Apply for a state or local government down-payment program.
- Use a private down-payment assistance program.
While some of these make great sense — an automatic savings plan, setting aside a bonus and allocating your income tax refund — do they really expect someone looking for a downpayment to have a boat to sell?
I'd also warn against taking money from your 401(k); not only will you have to pay taxes or interest on what you take out, but you'll be losing out on any compound interest you'd otherwise be making.
What tips do you have for saving for a down payment?
One of the most difficult things we're facing right now is saving for a number of different things.
In the short term, we're going on vacation in May, which requires some cutting back in the next few weeks to pay for the trip.
In the mid-term, we're saving for a down payment on a house, which will hopefully come in the next year or so.
In the long-term, we're saving for retirement, which we attack pretty aggressively with two Roth IRAs and a 10% contribution to my 401(k).
Tom is facing this situation, too, dealing with long-term and short-term goals.
We're not the only ones dealing with these issues. Thankfully, Vanguard has put together a podcast about this as part of their Plain Talk on Investing series.
In this podcast, we explore a question that many investors face: "How do I juggle multiple savings goals?"
Retirement, debt reduction, college expenses, and buying a house all require significant savings and investing. Jack Brod, head of Vanguard Asset Management Services™, says that to reach multiple savings goals you will need to prioritize them and you may need to make some tough choices along the way.
Listen to the podcast below; click play to get started.
My house's furnace and air conditioning unit are a little over 20 years old. Since many other things in the house have gone bad since I bought it last year, I'm amazed neither of these two has died yet.
I have heard that now is a good time to the best prices from contractors on replacements, so I am in the process of getting quotes. I figure I could spend my tax refund on them to avoid problems in the future, since with this economy it looks like I will own this house for at least the next three years.
The first quote I received came in at $3600 for everything, which I thought was pretty good (research online had told me to expect a cost of between $4500 and $5500). The second quote came in at $7600, for equipment of the same specs but different manufacturer.
I did some research, and everything I've read states that the manufacturer of the $3600 quote is very reliable, if not the best in the industry. Assuming this first company checks out, was this second company looking to make around $4000 more in profit off of me?
It's unbelievable that a company can try that, but I guess they are used to working in situations where heat is in immediate need, and people go with the first company who answers their call.
This certainly is a lesson that one should be prepared for potential emergency situations like a broken furnace or AC unit. It's also important to have funds set aside for such emergencies or capital expenditures.
Even though I may be cutting short the lives of my existing units, I'd rather be safe (getting a good deal now) than sorry (being taken advantage of when it's January and the heat won't work).
Tom Valenti is a marketer and project manager who currently works for a financial institution in New Jersey. For more info, visit him at http://tomvalenti.com.
We went to look at house today — it's the first house we've looked at, and we may or may not be ready to actually buy it.
It's a bank-owned house — most likely it was foreclosed upon — in kind of crummy condition. The carpeted floors are dirty, the walls need to be painted, and there's some junk around.
It's a decent price for the neighborhood, and has potential — but since it's owned by the bank, it's sold as-is. Meaning, even if we are getting a good price for it, there's still a lot of work to be done on it.
It was also our first experience working with a real estate agent, and with that brings a lot of questions.
The agent is technically working on behalf of the bank to sell the home, so we don't have to pay her anything, but I'm always skeptical of how much what she offers is actual help and what is sales.
For example, using the realtor's lender. I'm open to getting a quote, but would never not shop around.
When it's such a big life decision, it's difficult to work with someone you can't necessarily fully trust. You know what I mean?