Short Term Goals

In one of my earlier posts, I've blogged about having short term goals, along with mid-term goals and long-term goals. I can't emphasize enough the value of having these goals. Developing clear goals with easily measureable progress is vital for any type of personal development. Essentially, if you're unsure about what you want to do or what you want to be, you will never be able to focus your energies towards that achievement. In this post, I'm going to list the Short Term Goals that I've listed. They are listed in their order of importance:

- Figure out Monthly Budget
- Start helping out parents on a monthly basis
- File away all my paperwork in an organized manner
- Save up for a Digital Camera

Figure out Monthly Budget
This is by far the most important item in my list. I'm looking at this as my stepping stone towards financial freedom. Without this planned budget, I would have no idea how much I'm saving/spending on a monthly basis. And without that information, it is impossible to plan for the future in terms of how much money i'll need to retire (preferably retire young!), or what I'm going to do even in the next 6 months or so. I am going to figure out a monthly budget, and make sure I adhere to it, and balance it out, with extra cash leftover to hedge against my future costs. The main aim: SPEND LESS THAN WHAT YOU EARN!

Tasks:
- Track spending for a couple of months in order to have an idea about my spending habits and where my money goes.
- Develop a budget spreadsheet, and develop a sample budget, and compare how I did the last few months by tracking my expenses.
- After seeing how I did -- develop a golden budget for myself, something that is realistic and achievable, and something that will give me enough left over to build my future.

Start helping out parents on a monthly basis
I've always sent money to my parents -- just never on a consistent basis -- and therefore, they've always looked at that money as 'bonus money': something that's good when it comes, but not to depend on it. However, I think I should do my part more responsibly, and start sending them money at the same time every month -- it doesn't have to be a lot, but enough.

Tasks:
- After figuring out budget, see how much I can afford for my parents

File away all my paperwork in an organized manner
I literally have piles and piles of paperwork all scattered around my whole place. They're mostly bank statements, bills, and other miscellaneous items along the same lines. In order to have a more organized life, I need to start filing away important paperwork properly -- so that I can always find what I need when I need it -- you never know what situation may arise in the future, and staying organized will help out immensely when the need arises.

Tasks:
- Get some cheap folders, and start filing away all important incoming mail from now on.

Save up for a Digital Camera
Now this is a little tricky, mainly because I couldn't resist the urge to wait for one, and decided to get it already. I'm now an owner of a brand new Canon SX200 IS Digital Camera. When buying things, I always go by my personal rule: Buy good stuff, and from good dependable manufacturers, to get the best value for your money. Although this camera cost me around $300 bucks -- I dont think i'll ever need a camera ever again for quite some time, and hence, that kind of justifies paying that much for it to me.


As you can see, I've listed 'Tasks' for each of the items in my Short Term Goals. They aren't that impressive, but at least they are smaller sub-goals, and stepping stones that will help me achieve of my short term goals. They give me a plan to succeed, and by following the tasks one by one, I should be able to achieve the goals. Lets see how this works out. I hope it will work -- or else, I'll have to figure some other way to motivate myself to achieve my goals!

Sending Money to Canada from the US

Every month, I make an effort to help out my parents by giving them some money to deal with monthly expenditures. On average, with the condo fees, mortgage, and food, they usually spend CAD $2000 on a monthly basis. Since I live in the USA, I did not quite know the best way to send them money. There were a few issues to deal with, such as wire transfer fees, and whether its cheaper to exchange the money in the USA or in Canada. I ended up paying them a few months worth of money everytime I visited in person, and let my dad handle the exchange.

Free International Wire Transfers at Washington Mutual Bank:
However, I recently opened up a Washington Mutual Checking account, mainly because they offer free international wire transfers. At least there is no fee for sending the money through Washington Mutual. However, the bank receiving the money may charge the recipient, so you have to make sure that doesn't happen. Most banks dont charge for incoming wire transfers, they only charge for outgoing transfers. So if your checking account charges you for incoming transfers, then you better get your money out of there and get a better account, unless your bank changes their policies.

Information Required:
From my parents cheques, you can get the account number, and the bank's transit number. Here's a sample cheque:

Sample Canadian Cheque

What you require are the bank account number, and the bank routing number (may also be known as Transit Number, or ABA number in the USA). In addition, you also have to call up the bank to get the International SWIFT code, which for my parents bank, happened to be TDOMCATTTOR. You also need the address of the branch that this money is going to be sent to. So I went to the bank with this information, and at my first attempt, they couldn't send the money -- or more precisely, their system does not accept the provided information. The main problem was that they require the Transit # to be 9 digits long, and there was no way I could figure out how to get the 9 digits.

So after quite a few phone calls, I finally get the right customer service person who is knowledgable enough to enlighten me! (The first person I got at customer service had no idea why, and suggested i go back to the bank and tell them they are wrong :S -- what a stupid suggestion since their system clearly only accepts 9 digits). So the information you need to provide are:

Account Number: You need an 11 digit account number which for the sample cheque is: 1234-1234567
Transit Number: This is the tricky part, you need to add an extra '0' at the start, then the financial institution number, and then the bank transit/branch number, so for this case, it would be: 0-004-12345
SwiftCode: For my parents bank, that is TDOMCATTTOR.

And that will be enough information, along with the bank address, to allow you to send the wire.

Summary:
To summarize, for the above given cheque, your account number, bank transit/ABA number, and International Bank Routing Code (SWIFT Code).

Account Number: 1234-1234567 (Designation Number + Account Number)
Bank transit/ABA number: 0-004-12345 (0 + Financial institution number + Bank Transit/branch number)
Swift Code: TDOMCATTTOR (For TD canada bank in Toronto - For a list of SWIFT Codes for Canadian banks, please see here).

And that is how I send money to my parents every month. The only inconvenience is that I have to physically go to any of the bank's branch to do this. It would have been great if they allowed something like this to be done online through your checking account.

Financial Planning

I recently took my first step towards financial frugality. In my last post about my first foray into personal finance, I listed my tabs on my daily spending, and posted up that spreadsheet. I have also tallied up my networth for the previous couple of months -- and I am wondering whether I should post that up or not. However, I am still not sure exactly what my next steps should be. I will try to plan out my steps, and try to divide them into short and long term goals in this post. Not only do I need to track my spending, but I also need to plan/save for my future expenses, and try to limit what I want to purchase, and maximize what I want to save. I also need to pay off my student loans, and set aside some money on a monthly basis for my parents monthly expenditures. What I also want to do is track my badminton progress. I am not sure exactly how to do that, but I think i'll allocate some time to trying to figure that out. I also have to start saving up for a car, but that will happen after I figure out how much I can afford to put aside each month, and how long I am willing to wait for the car. I also want to know how to design websites and use programming languages such as PHP and perl. In the age of computers, these skills are always an asset, and I think I have enough spare time even after excessively crazy amounts of badminton to work on these skill sets. I think setting goals are very important -- short and long term goals. These goals keep you constantly motivated, and through that, it becomes easier to realize your goals. The short term goals help to tell you that you're in the right path, and helps you to just suck everything up and just keep at it!

So here are my goals, which I shall categorize later:

1) Figure out Monthly Budget.
I need to balance my monthly budget, and make sure that I am living within my means. This entails adding up all my monthly expenses, and then allocating enough funds for each on a monthly basis. Since I'm been keeping track of my expenses, I should be able to do that pretty easily.

2) After figuring out budget, allocate money per month for the following future expenses:
- Buying my VW GTI
- Paying off my student loans
- Helping Parents out
- Some direct stock investment plan
- Buy a digital camera

3) Figure out a way to track my badminton progress.

4) Need to learn PHP, or Java -- and set up a webpage.

5) Pay off Home Mortgage.

6) I need to gather and file all my random paperwork (includes bills/notices/account statements etc etc)

Now that I look back at the above list, I think I need to make three categories: Short term, Mid term, and long term goals. So first up are Short Term Goals:

Short Term Goals(In order of importance):
- Figure out Monthly Budget
- Start helping out parents on a monthly basis
- File away all my paperwork, and organize them
- Save up for a Digital Camera

Mid Term Goals(In order of importance):
- Paying of my student loans
- Figure out stocks to invest in direct stock purchase plans
- Learn programming
- Figure out a way to track my badminton progress

Long Term Goals (in order of importance)
- Pay off Home Mortgage
- Save up for VW GTI

In my next few blogs, I will try to detail my plans for each of the listings in my short/mid/long term goals, and try to list clearly quantifiable milestones/benchmarks so that I can track my progress. This is really important. Without an accurate way to track and measure your progress, you have a good chance of getting derailed from your goal, and eventually, in the worst case, not attaining it at all.

First Foray into Personal Finance

This is going to be my first post about Personal Finance. I have been meaning to do this for quite some time actually. Why??? Well, I was never really short of money, even through my undergraduate life. The Scholarships more than made up for my tuition, leaving all the Student Loans that I got completely at my disposal -- which was a horrible idea since I was so irresponsible. By the time I graduated, I realized my total cash balance dropped to under $300 dollars -- when it was once higher than $10,000 when I was in 2nd year. To put that in perspective, I have, to date, NEVER been able to accumulate so much cash(and I've been working for three years now). Ever since that debacle, I used to keep track of my daily purchases in various places, such as my daily agenda. For the coming many years, I never really did anything with that information. Since I've recently made an effort to take hold of my financial situation, I have decided to track my spending for a month, to see exactly how much I spend on monthly/daily basis -- What I found out was quite shocking at first glance :S!

Here is a summary of all my purchases/expenses for the month of March 2009. The entries in light blue are shopping expenses. The entries in red are gas charges for my car. Along the bottom, I've summed up all my Sunday purchases, Monday purchases etc. And along the right, I've summed up all my purchases for that particular week of the month. (Btw, this doesn't include utilities and other monthly expenses -- I've kept them in another list -- these are just my daily spending lists):

March 2009 Expenses

WOW!! I spent around $2100 in one month -- and I'm just a single guy. And this doesn't even include my monthly utilies (gas, electricity, HOA Fees, Cable/Internet/Phone, and Mortgage!!!!!!). My whole family together doesn't even spend half that much! At first glance, this totally shocked me, and I finally began to realize why my credit card debts were never going down. Here's a breakdown of my expenses:

March 2009 Breakdown of Expenses:

Shopping:

I've spent a total of $218.66 on shopping this month. I've basically bought a couple of XBOX 360 games, and an XBOX 360 joystick worth around $120. I needed the joystick to have 4 controllers, so we could play some Halo 3 Multiplayer maps with 4 people. The rest of that amount was spent at a clearance sale at Sport Chalet. I think the games/joysticks were worth it. The clothes??? Probably not, since I have a huge collection of clothes anyway -- and just because there was a huge clearance sale just reinforces the fact that advertising works :P!! My goal next month is to reduce the amount of money I spend shopping!

Tax Fees:
HECK!! 260 bucks for preparing the tax return at H&R Block. That includes a $30 something charge for the 'Peace of Mind' Return where H&R block will pay all the penalties if any, and look after me in case of an IRS audit. But still, 260 bucks??? I thought they were kidding at first -- but then I came around to accepting it. I only decided to go through H&R block this year because of me being a first time home buyer. I'm definitely doing my own taxes next year, and avoiding these fees.

Gas Bill:
$175 for fuel sounds about right for me. I get around 32 to 35 miles per gallon on my Honda Civic, so I can't really complain too much about that. I'll keep an eye on this in the future.

Auto Repairs:
My radiator shaft cracked, and hence required a total replacement. Obviously this wasn't planned, contributed to my huge monthly expense bill for March 2009.

Airline:
I made a trip to good ol' Toronto near the end of March -- So that cost my $330 bucks. I had a week off work, so thats why I made the trip down. Actually, the week off work was unpaid, so not only am I not getting paid for the last week of March, I spend a further $330 bucks on a trip to Toronto!! I think its ok though: a trip to Toronto is always good for me.

Weeds:
I bought some DIY weed products. It will pay off in the long run I believe.

Food:
Another $500 for food. Actually, this one was a pleasant surprise. I eat out almost 2-3 times a day, and with rising food prices, I expected to be paying between $600 to $700 for food per month. So relatively, $500 a month is good -- but I think I can improve that figure.

Summary:

Well, I'm glad to have summarized my monthly expenses for March. At least it gave me a quantified view of where my money 'disappears' off to every month. I need to create a budget for my future months. The Auto Repair and Toronto Flight kind of made this month an expensive month. All the other expenses were on par with what I expected at the back of my head. I need to figure out what my net worth is now, and budget for my future known expenses, and try to liberate myself financially! More on this soon..... 

Debt Free (Almost)

I finally got back my tax return money today. After itemizing my deductions this year, I got back a sizable return this year. So what did I do with my tax return??? I resisted the urge to spend this extra money to buy stuff(or worse yet, finance more purchases), I ended up paying off all my US credit card debts. So now, all my credit card accounts have zero balances (at least in the US). 

My short term goals this year was to become debt-free by my birthday this July. I'm not just quite there yet. I still have some student loan debt from Canada, and now, my next goal is to aggressively pursue that and eliminate it off my account! 

For some reason, my credit card balances were never getting any lower, although I kept paying sizable payments every month (between 500 to 1000 dollars a month). After seeing my credit balances being racked up higher and higher, I finally decided to look more closely into it and try to reduce the debt that I owe. I made up a plan last November, and according to that, I would have been debt free by this July. I exceeded that target day by three months, and got to that state by the end of March. This means that more of the money I earn on a biweekly basis will be available to me for other activities (no - not shopping :P). I'll have more leftover to invest in both short and long term trading, after obviously, finalizing an investment strategy. 

About that investment strategy, I emailed a Financial Planner from Ameriprise Financial. I got his email from the Employee Network Discount site from my workplace. Lets see what he has to offer, as a financial planner, and I have to check out whether the Employee Discount will give me a definitely advantage or not. 

I have to be careful now, to not let the euphoria of a 'zero' balance let me get carried away and start racking up debt knowing that I can pay it off :P. Knowing me, I think thats highly possible, and so I have to be careful!! 

I haven't been blogging for a while now, I was just a little busy over the last few weeks. Hopefully, I can resume my blogging career now :P. I need to post some more info on badminton!!