2013 401(k) Limits

The IRS has just release the 401(k) limits for 2013.

For 2012, the maximum for 401k, 403b, most 457 plans and TSPs was $17,000 per year.   Due to Cost of Living and Inflation, these limits are now $17,500.  Not a huge difference, but something for those who can afford it to  know about.

The catch-up contribution for those 50 and older is unchanged at $5,000.

 

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A Personal Spending Plan

Budget or Spending Plan.  Whichever you decide to call it, is vital to the Get Outta Debt experience.   At first, we called it a Pain.  Then a Budget.  After having problems with the ‘B’ word, we took to Dave Ramsey’s term: A Spending Plan.  When combined with the goal of getting out of debt, and the commitment to achieving that goal, the Spending Plan tells your money where to go.

Before we got on the Spending Plan, we really didn’t keep track too well on what we spent out money (or credit cards) on.  When we first got married, and I was making very little, we would consult each other if we wanted to spend more than $20. Then as we increased our earnings and got the credit cards, we lost focus.  Fast forward 5 years, we recognized that we might be a little out of control and decided to see a Credit Counseling company.  The good news was they didn’t recommend that we get on a DRP (Debt Reduction Plan), but the process of getting our facts together, helped us form our first ‘Budget’.

Set Your Savings Goals

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It’s That time of year again..

It all starts on July 5th.. Yep.. Christmas Shopping Season!

What? You haven’t started yet? I could swear I’ve seen displays up in the stores with Santa wearing a Jimmy Buffet style shirt and shorts.  As part of our approach, we’ve started the Christmas Saving back in January and then start shopping when we see the good deals.  Using Direct Deposit and an Account at ING Direct (not affiliate link) we’re able to pretty easily stash some cash aside for Christmas.

ING (now part of Capital One) has a very nice system for setting up Savings accounts for free.  Once you have your initial account set up, you can setup up Goal Oriented accounts in less than 5 minutes.  We use this for our Christmas Fund, Emergency Savings Fund and soon our 25th Wedding Anniversary Trip Fund.

According to the American Research Group, Inc,  Shoppers around the country say they are planning to spend an average of $646 for gifts this holiday season.  Seem like a lot?  Well, this amount is down from $658 last year.

How about some ways to save?

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Waiting too long: Retirement and Compound Interest

Back when I first started out in my career (1986)  making a whopping $14,000 a year, I was offered my first chance to participate in a retirement account.

“Retirement? I’m 23 years old.. That’s like.. Forever away. I need the money now. I have Student Loans to pay and beer to buy. I’ll pass. I’ll have time later”.

Yes, please kick me. I took a very uneducated view of my financial state. Blame no financial experience, poor/no advice from parents or whatever else is handy. However, it is obviously all on me. So we scratch that up to the idiocy of youth and deal with where we are now (26 years later).

“Time is on my Side”… Jagger/Richards

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Retirement Savings

Big news in the Outta Debt Household..

Note to self:  Need to come up with a cool nickname. Get Rich Slowly has ‘GRS’, Budgeting in the Fun has ‘BFS’..  But somehow the ‘OD’ for Outta Debt doesn’t read right… ‘Got Outta Debt’ leads to ‘GOD’, would be pretty bad idea too..

But I digress… My Better Half just started working Full Time as a Kindergarten Assistant!  She’d been a substitute for the past few years at one of the schools, and they finally had an opening and she’s in!

We had used her subbing money to help us with our Debt Snowball and now we’re in the nice position of figuring out what to do with her salary.  This led us to talk about where we are in life (not quite 50), what needed to be done around the house, repairs, etc.

And of course, how we’re prepared for retirement.  Answer there is ‘not so hot’.  According to a recent Fidelity Investments report, the largest 401(k) administrator in the US says the average balance for a 401(k) is around $73,000 at the end of June.

So thanks to some recent upswings in Apple stock, we’re sitting right about with the average.  Not where we’d like to be.  And that brings the age-old question, at least for me.  How much DO we need to retire?   As you might expect the answer typically starts with ‘It Depends’.

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Coming back in… Quicken goes mobile.. Internet Security

Hello all… Been away a little while working on my regular job has kept be very busy these past few weeks.  I work for a Professional Services (aka Consulting) company that specializes in moving Organizations to Cloud Computing.  This is an extreme growth area that is getting a lot of media and investor attention.  And business is doing very well, which means there’s a ton of stuff to do.. leaving me less time for this blog.

I’ve always said ‘Better too busy than not busy enough’.  (More job security that way).

I wanted to post so that you knew we were still alive 🙂

And because I saw something I’ve been waiting for a while.  A mobile version of the venerable financial package Quicken!  Quicken 2013 will allow you to add transactions from your mobile device (Android, iOS) and sync to your Desktop Quicken file.  I’d been a casual user of Mint but hadn’t liked it’s inability to allow me to schedule recurring future transactions.  I like the idea of entering my transaction at the point of sale (i.e. grocery store, movies, etc).  Of course, splitting out the amounts for:

  • Groceries
  • Household
  • Medicine
  • Toiletries

on my mobile device does sound a little tedious.  I may do that portion at home.  What would be very beneficial is the ability to use Expensify which can scan/capture your receipt on a web or mobile device and have it sync to Mint or Quicken mobile would be way cool!  (Yes, I do have my propeller hat on).  

Anyway.. given my previous posts on Internet Security I’m still a little hesitant about going this route.  Knowing the industry as I do, I feel confident in the security in place with the systems I know and have worked with.  Not sure if I’m there with the more consumer based companies.

What about you? Do you feel confident in placing your financials ‘in the cloud’?

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Best Password Protection

I wanted to post this to you as soon as I came across it.  This Lifehacker Article is a great primer for Password security.  It’s a quick follow-up to my post from a few weeks ago.

Personally, I’ve been using Keypass and it’s been working wonderfully.  I need to look at some of the options that would include my iPad, as some of my accounts can be accessed there.  So having the strong password, and a case of ‘What was it?’ makes it difficult for me to easily access it.

What about you, Dear Reader?  How have you been handling your password security?

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Credit Counseling & Financial Freedom

You see the signs everywhere.. Credit Counseling.. Debt Reductions services..  Like most people, you tend to ignore the hand-written ones on the side of the road (I hope you do).

This story I saw reminded me of a time when we got out of debt (the first time).

While we weren’t $92k in the hole, we had much more debt than we felt comfortable with.  We also knew that we needed help, so we sought out Consumer Credit Counseling and it was great.  I know there are some horror stories of debts not being paid, amounts being incorrect, etc (even members of the National Foundation for Credit Counseling) our experience went well.

They helped us through the budgeting, contacted our credit cards and got us on a plan that got us out of debt. We finished the Debt Management Program ahead of schedule (thanks to selling a Rental property we had in Houston) and did pretty well staying debt free until we were dealt some Lemons. (That’s for another post).

The Big take away from this experience was the budgeting process.  This should be the first step of getting yourself out of debt.  Think of it  as a Road Map.  You know where you are (in Debt) and you know where you want to be (out of Debt).  The budget helps you get from here to there.. just like a roadmap.

 

The item I want you to take away from this is: If you decide you need help, don’t get it from a hand-written sign on the side of the road.

 

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Credit Card holders Losing a ‘Feature’

According to this article in USA Today, many credit card companies are ceasing to offer the ‘Credit Protection’ service (i.e. ‘Insurance’) on their cards.  I’ve always thought of these as a bad idea for Consumers.  Even BDR (‘Before Dave Ramsey‘), when some of our cards had  a balance near $20k, I would never consider one of these options.

During the tech bust of 2001-2002, I was down-sized from my company.  At the time, I think we had around that $20k on a Citi Card.  In talking to my better half (aka. Mrs. OuttaDebt) we discussed the idea of this ‘insurance’.  I believe the cost was around $0.59 per $100 on the card.  That would have been around $120/month added to the card!

What happened after this layoff is for another post, but it didn’t make a whole lot of sense for us to pay more per month in insurance than our minimum payment was at that time.  Fortunately, I was able to find some contract work pretty quickly, but if I hadn’t been as fortunate, I hope we would not have changed our minds.

Do any of you have this Credit Card Insurance?  Has it helped or hurt you?

 

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Amazon Book Review

Folks, I posted my first review on Amazon for this book How I Make Money Blogging: The Beginner’s Guide to Building a Money-Making Blog .

Written by Crystal over at Budgeting In The Fun it’s one of the things that helped get me moving on starting this blog.  Be sure to hop on over to her blog and check it out.

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