Retirement Savings

When you are just starting out it is really hard to think about retirement, let alone start to save for it. Of course, it is also the best time to begin saving for retirement because you have the most time.

When you are young the two most popular savings vehicles are the 401k/403b and the Roth IRA. The rule of thumb is to only contribute to your 401k/403b if there is a match. If there isn't a match you should be contributing to a Roth IRA instead.

I think where you decide to save for retirement depends on the type of person you are. This is especially true when you are young. The beauty of a 401k/403b is that because it is funded before taxes and taken directly out of your paycheck you never see the money. To me, it just feels like another tax. Whereas a Roth IRA is funded with money after taxes.

For me, this is completely mental. If I don't see the money in my bank account, I don't consider it money I can use for something else. However, for the Roth I see the money in the checking account, and then I see the transfer out. It is easier to think about all the things I could be doing with that money.

For this reason, I believe that we should choose whatever path will allow us to save the most amount of money. Never forget that personal finance is just that - personal.

My Student Loans

I have two student loans. One is just under $1,700, the other is just under $12,000. I find the smaller student loan annoying. It is small enough that I could pay it off with my savings, however I've never been able to actually take that step. What if I pay it off and then something happens and I need that money?

Before I got engaged my plan was to focus on paying off the smaller loan this year. Obviously, my priorities changed. In fact, I allowed my student loans to go into deferment so I could save as much as possible for the wedding.

I've been lucky enough to come into an unplanned $1,700. I thought about putting into into my neglected emergency fund, or using it towards much needed weddings savings, or put it in my Roth IRA.

Instead, I've decided to pay off that smaller loan and I am so happy with my decision. I'm that much closer to being student debt free!

Is is better to lose?

I have been exploring yahoo's financially fit section and I've come across some really interesting articles. One I found really interesting is on Dream Prizes You Can't Afford to Win.

The main items the article cites are a house, car, vacation, and wedding.

The reasoning behind the house and car are the taxes you end up spending on these items. Prizes that normally offer you vacations and weddings come with secret costs that can also add up quickly.

he Bottom Line

Many people dream of winning a big prize in a lottery, contest or sweepstakes. The problem is, when the prize isn't cash, the tax burden and additional expenses associated with your winnings can really add up. Before you accept any prize, find out what it's worth -- and what it will cost you -- before you accept it. Turning down a prize can be hard to swallow, but in some cases you'll find it much more palatable than the dent it could make in your savings.

It is an interesting point. Before accepting a prize it is worth it to take the time to figure out what additional costs will accompany the prize.

Photo by U-g-g-B-o-y-(-Photograph-World-Sense-)

Weddings are very expensive (especially if you have a large guest list) and there is a lot of pressure to spend money. It is called an industry for a reason. There are a million of magazines, tv shows, books, and people telling you that you need this or that. For example:

Your invitations are the first thing people see so they better represent the rest of the wedding.

It is your special day so you should spend $300 on a pair of shoes.

Don't forget you need two cakes. One for you and one for the groom.

Your reception should have professional lighting. It is the "in" thing right now.

Simple, inexpensive invitations can be nice. Calligraphy is not necessary. And if people judge me based off my invitation, well I'm not sure I want them at my wedding anyway.

I hate when people say your wedding is the brides day. I'm sorry, but that is just not true. A wedding is about the couple, their families, and their friends. It is about bringing together two people, not just celebrating one. It is a day that represents your future, but it is not your future alone. No reason to blow all your money on one day. I think all the focus on the wedding day, makes it easy for people to forget the real reasons they are getting married. (Disclosure: I spent $130 on my shoes.

Two cakes!? I don't even like cake.

If you want professional lighting, go for it, but don't get pressured into it.

Having said all that, I'm really looking forward to the wedding itself. As F pointed out, it will probably be the only time that we have so many people that we love in one room. The wedding is going to be a blast, but it is our future together after the wedding that I'm really excited about.

Photo by Cupcake Sisters (Senel)

Honeymoon Planning Tips

I have a guest post folks! Today, Mr Credit Card from www.askmrcreditcard.com is going give us some tips on planning for a honeymoon (as he has seen me write about "becoming a wife!" here. Please check out his best credit card offers section if you are looking for a new credit card.

I took my honeymoon with Mrs Credit Card to Spain 13 years ago. Since then, I have traveled a lot on business trips and we have taken lots of vacation together. Looking back, we may have done some things differently. But here are some of my thoughts on planning for a honeymoon.

A honeymoon vacation is the perfect antidote for the wedding itself. While both require meticulous planning, your honeymoon should be intimate and stress free, unlike most weddings. Planning a honeymoon is different from a normal vacation. Even adventure seeking travelers will want to tone down the itinerary of their honeymoon in order to relax and get to know their spouse for the first time as a married couple.

Pick A Destination - Your first step towards planning a honeymoon will be to pick a destination. For this particular vacation, you will want to minimize the risk of unforeseen travel disruptions, while maximizing the amount of time the two of you can spend together. Travel disruptions can take many forms, from hurricanes to political strife. Start by looking at the historical weather of your destination at the time you will be visiting. Avoid any destination in a hurricane or typhoon zone during the defined storm season.

Another consideration is to avoid a destination that either of you have visited in the past. Your honeymoon is symbolic of the new journey you will be taking together as a couple, and visiting a place that brings up old memories is not appropriate. Consider what time zone you will be in, as you might not want to spend the first week of your married life together getting over jet lag. For most people, jet lag is more of a factor when traveling east than west, so visiting Europe from the west coast of the United States would be especially challenging.

Another factor you may want to consider is the currency exchange rate and the general cost of traveling to a destination. If money is at all a factor, it is much more enjoyable to visit a destination where costs are similar or below what you are used to paying at home. With a favorable exchange rate, it is much easier to splurge and enjoy yourself, as you will feel like everything is a bargain.

Plan Itinenary - Once you have chosen your destination, it is time to plan your trip. Purchase at least two guidebooks so you can get a feel for the highlights of the area. This is one time where books are superior to the Internet, as most web sites on the internet will be selling you something. I would also recommend consulting a travel agent that specializes in that destination. A specialty travel agent will have specific knowledge of the region that is invaluable. You also obviously have to set you travel budget.

Frequent Flier Miles or Reward Points - If you have frequent flier miles that you are trying to use for airfare, this may not be the best time to use them, unless off course your travel dates fall into "non-peak" season for your destination. These days, travelers on award tickets have to be extremely flexible in order to find the few available seats to a leisure destination. This is a luxury you will not have due to the fixed dates you will need to travel. If seats are available, take advantage of them, but be prepared for the reality that you will be more likely to be earning frequent flier miles than spending them on this trip. Hence, rather than trying to earn frequent flyer miles on an airline credit card, you might be better off using a general travel rewards credit card where you can use your points for any airlines with no blackout dates. Get one months or even a year before the actual date to give yourself time to accumulate points. Most of these cards these days allow you to either book your own trip and use your reward points to pay or you can use their travel portal (which is powered by one of the big online sites) to book your trip and use points to pay for them. Most of these reward cards do not have annual fee and so that is also a great bonus.

Hotels and Frequent Guest Points - When choosing accommodations, try to lean towards smaller hotels rather than large resorts. This trip is about getting to know each other rather than battling the crowds of a large resort complex. While, it may be more difficult to use frequent flyer miles for your airline tickets in peak season, you will probably have an easier time using hotel reward points to get free rooms. And if you choose this route, the value you get can be significantly more than using a simple travel rewards card. Here is a story of how someone got five free nights with frequent guest points earned from credit cards, (she was earning points from the Starwood Preferred Guest program). Noticed how she earned points even without staying in the hotel at all!

Get your documents in place - When traveling internationally, be sure to take all necessary precautions to ensure your travel documents are in order. If you will be applying for a passport, submit your application months in advance, as delays can be unpredictable. If you already have a passport, ensure that you have obtained any necessary visas, as more countries are now requiring that you obtain a visa before traveling. Also, check that you passport does not expire within a few months of your travel date, as some countries now require passports be valid for 90 days after your scheduled departure. When making airline reservations, make them in whatever name that your passport is in. The time to get a new passport with a new name is after your return.

Finally, a word about travel insurance. Travel insurance can protect you against financial losses caused by unforeseen circumstances. Unfortunately, each insurance policy caries a web of exclusions that can render it worthless when you need it most. Before purchasing any travel insurance, thoroughly examine the details of the policy with a close eye on what is included and what is not. Keep a copy of the policy with you when you travel, as adherence to it’s terms will ultimately determine whether or not you will be reimbursed for expense incurred in the event of a travel disruption.

With proper planning, your honeymoon can truly be a vacation of a lifetime.

Travel Budget

I leave tomorrow and I'll be traveling for 23 days. I still can't believe I'm actually going. I have a feeling it won't hit me until we are on the plane or at least on our way to the airport. As I am preparing to go I've been reviewing my budget. At this point before a trip there are always two parts to the travel budget. What I've spent already and what I anticipate spending.

I've already spent:

$967.41 on my flight

$544 on various flights within India and to Sri Lanka

$73 on my visa

Which means so far I've spent:

$1,584.41

What I'm hoping to spend while I'm there is $1000 in India and $500 in Sri Lanka.

However, I have $2000 put aside to fund the rest of this trip. I wanted a little wiggly room in this budget. While I'm all about traveling frugally, I also don't want to be so cheap I regret it.

The other reasons I have an extra $500 padding is that I hope to find gifts for my bridesmaids and I plan on buying at least one, maybe two more pairs of glasses.

I'm pretty much packed and ready to go, the only thing I want to pick up is a small travel calculator I can use to help me budget with pen and paper. Using excel for all my budgeting needs means I'm pretty rusty with good old fashioned pen and paper budgeting. =)

And I'm Off

Believe it or not I leave for India this week. Not long ago this trip felt so far away and now I'm about to leave!

I have $2000 saved that I can spend while I'm there. I actually hope to spend quite a bit less, as all my flights have already been paid for. However, I also want to look into possibly getting my bridesmaids gifts while I'm there so I've over budgeted.

I meant to post my full India budget today, however google docs is down so I don't have access to it at the moment. I will post it before I leave.

pic by ironmanixs