My 2012 Income Goal: failed, but had a good time anyway

With only one month left at 2012, I have a pretty good idea of where I’ll stand financially when all is said and done. Instead of waiting until the bitter end, I thought I’d reveal now my income goal and how very close I came to success.

In 2012, I set out to gross $70,000

To date, I’ve brought in just over $58K of that, or about 83% of my goal. I expect to earn another $5,000-$6,000 in December, bringing my final total to $64K, or about 91% of my goal. In short, I won’t make it. But I’m cool with that.

After all, it wasn’t a BIG failure. I did pretty good.

If I hadn’t gone without a paycheque in July to accommodate a pay schedule change at work, I would have reached 95% of my goal this year . Oh well! At least that won’t be happening in 2013. The bulk of my income came from my full-time salary, with some extra income from freelance writing and this blog. Very little came from passive income, which is the main source I want to increase over the coming years.

For 2013, my personal income goal is $90,000

Originally I would have liked to set it at $100,000 but I’m not totally sure I’m at the six-figure mark just yet. I thought about setting it at $70,000 again, but my average income for the past 3 months has been about $6,000. This means that for the last little while, I’ve been living and spending like someone making $72,000 (maybe you noticed when I was buying iPhones and TVs and hanging out in Vancouver?).

Setting my goal back at $70,000 for another year is too low, because I expect my income to increase in 2013 for a few reasons:

  • I will get another raise at work.
  • I have more money invested now than I did at the beginning of 2012, which will generate more passive income for 2013.
  • I’m pretty greedy.

As for upping it another $20K for 2013, I realize that’s pretty ambitious and no, I don’t have a plan — but if I fail, hopefully I fail with distinction like I did here.

I set goals by choosing whatever seems just out of reach. 

Because if you choose something that is already within your grasp, it’s not a goal, it’s just a to-do item.

I’ll be honest, grossing $6,000+ per month is weird. It feels both like more and like less than I thought it would. I feel the perks of my income all the time, and then at other times all I feel is its limits. I worry that there isn’t a sum that I’ll live happily with, and then at other times I’m sure it’s just around the corner ($90,000?).

I’ve started assembling some spending and earning plans for 2013, but I still don’t have the personality of an ardent budgeting machine, as befits a personal finance blogger. Actually, as time passes I sort of kind of care less and less about personal finance. Don’t get me wrong, I will always love money, but as the vice-grip of debt loosens, so does the motivation to worry about every dollar that passes through my fingers.

I won’t be meticulously tracking my income in 2013 on the blog the way I did this year — it’s just too much to update every time I get paid. Same goes for Net Worth, which is failure number 2 for this year (though that one is not entirely my fault, since stocks were tanking recently).

Guest Post: Kids Activities vs. Financial Health: Which One Should You Choose First?

If you have kids older than ten years of age, you’ll be probably be hearing a lot about karate, skating, dance, sports, piano, swimming and even art.  While the fact that your kids are interested in so many of these activities might make you happy, generating money for these hobbies is a really pressing issue with your low income and mounting debts.

According to stats, the employment to population ratio is just 58.5%. Among those who are employed, 10% earn below $35,000 a year. Many of these people have taken loans, and are having difficulty in paying them back. However, the availability of debt consolidation programs in the US is a relief for many who struggle with their finances. There are also similar programs which can help you generate funds for your child.

You may really want your kids to take part in all these activities, but the high fees for all these classes are too much to bear.  This is not the case anymore. If you act smart, you can tolerate all these added expenses and still attain the financial health you want. You can generate an extra income if you have the time. If you do not, well there are still alternatives.

Generating Income

Generating income from a second source other than your current job is a great way to manage your budget. Here’s how you can do it.

§  Sign up on a freelancing website. There are no charges for making an account. Browse through the many projects, and bid on the ones you like. This is really a great way to earn money especially since most of the projects range from $100 to $250. The only thing required is some extra time on your part.

§  Sell all the unused stuff in your house. You’ll be fairly surprised at the amount of money you can earn in this way.

§  Create a website, and request other companies to advertise on it.

Alternative Ways

There are many alternatives if you cannot take out the time to engage yourself in the above mentioned activities.

§  There are many online videos on YouTube and similar sites which are great for beginners. So if your child likes karate, then download these videos. Together the two of you can learn the basics.

§  Suppose your child likes dance. Once again search online for tutorials videos. You’ll be surprised to find resources for all types of dances, and these are extremely effective in teaching young children. If any of your friends know dancing, then you can also request them to teach your child for free or for nominal fees.

§  If your kids like skating, then why don’t you arrange a family skating event? You can even spend some quality time with your kids this way. When your kid becomes pretty good at it, or at least learns to maintain his balance, then you can enroll him in classes later on.

§  If he likes sports, then arrange weekend matches. Once again, these are a great way to spend joyful moments with the people you love most, and they are free.

§  If your kids like swimming, then just take them to a nearby pool.

§  Take a child loan. You do not have to worry about making payments or adding to your debts, because the availability of debt consolidation programs in the US is a relief for many who struggle with their finances.

The Bottom Line

Make use of the above mentioned techniques, and try to put as many as you can in your schedule. If you do, you will not have to choose between financial health and your kids’ interests. Once they become really good at them, then you can register them for professional classes. The money will not be wasted, and you yourself will be proud of their achievements.

Just give yourself and your children time. You might overcome all your financial restraints in the future, and then you can spend even more on your kid without having to think about money. Go with the flow of time, and take things slowly. This way you will not have to make regretful decisions.

Author’s Bio

CJ’s main interest lies in the field of finance. She understands that the availability of debt consolidation programs in the US is a relief for many who struggle with their finances. She regards money important, but considers it insignificant when it comes to her kids.

Happy Birthday to ME

I turn 27 today! I am officially “late twenties”. I continue to be unmarried and childless as befits my selfish and spendy nature. Honestly, I keep waiting to feel “old” at some point, but my personal success to-do list keeps growing and I really feel excited for the opportunity and experiences ahead of me. I also breathe a deep sigh of relief that I’ve completed school, found gainful employment, saved five-figures for retirement, know how to invest in the stock market, and otherwise exhibit signs of a successful adult. It’s probably all downhill from here.

Most of my partying happened on the weekend, and included a night of debauchery in which my iPhone 5 was lost/stolen on a dance floor and subsequently returned, a themed birthday party in which all my friends participated because they are the very best, and a dinner with my extended family that included roast beef and cake, as every celebration of my birth should. I feel very  loved <3

In order to maintain my personal tradition of over-spending on my birthday, I bought myself this:

Don’t worry, I grabbing any same day online loans. Overall, I kept this year pretty tame (no, seriously) because next year is my champagne birthday where I turn 28 on the 28th of November. Plans and spending are already happening, I will keep you posted.

In the meantime, readers read on! Your acceptance of me and my crazy ways is the best gift you can give. Thank you for your support and encouragement, and your hilarious contributions to this website. I love you all to bits!

I have a credit card with a $699 annual fee

Hello PF blogosphere, I am committing a grave personal finance sin to be added to the list here and paying for credit card. There’s no-fee credit cards all over the place, so why would someone choose a card with a fee — and an astronomical one at that?

Earlier this year, I got the MBNA cash-back card and for the most part, it’s been great. However, recently they changed some of their rewards criteria which made the card less valuable to me, namely setting a cap on their 1% cash-back to spending of $1,250 per month.

I spend on average $2,500 per month on my credit card, with some months as high as $4,000 to $5,000.

This is a combination of both work and personal spending, and as a result I was getting a $50 cheque in the mail as a cash-back reward approximately every 2 months. However, MBNA’s new rules means this would get cut back to about every 4 months. While I appreciate that the MBNA is still a no-fee card, it’s now offering me considerably less for using it.

So I went out at got a American Express Platinum card.

Now, you’ve probably already guessed that I’ve been eyeing the Platinum card ever since I learned about the elusive black Amex/Centurion Card. While I still can’t stomach paying that annual fee for that titanium beast, I am wholly enchanted with the prospect of qualifying for that card — mostly so I can screech “I AM THE 1%” and post photos on Rich Kids of Instagram and do other such superficial things that are all part of being in a pissing contest with rich people. The Platinum Amex is my gateway drug to douchey affluence.

Just kidding… mostly.

The card was actually recommended by a coworker who uses it regularly on our business trips. Once she told me all the rewards she was receiving, I was sold.

Benefits:

  • $200 annual travel credit that can be applied to things like airfare and hotel stays.
  • 1.25 reward points which never expire (unlike stupid airmiles!) for every dollar spent that can be redeemed for travel and other things.
  • TRAVEL INSURANCE. Including travel health insurance and baggage insurance, as well as flight delay and cancellation insurance (which I need, because god knows I never pay for it and I nearly missed my connection to Amsterdam at the Heathrow airport this year)
  • PURCHASE PROTECTION. Up to $50,000 per calendar year for purchases on the card that end up broken, lost or stolen — or even items you can’t return to the store for a refund.
  • Complimentary room upgrades and complimentary nights at luxury hotels, plus little perks like late check-outs and gift-cards to in-house hotel restaurants and spas.
  • Complimentary access to airport lounges.
  • Complimentary or discount companion tickets for first or business class international flights — if you were around for my twitter rant in July, you already know I’m never sitting in coach/economy class on an international flight ever again.
  • Complimentary enrolment in various car rental and hotel member programs.
  • “Front of the Line” access to pre-sale concert tickets to ensure the Maroon 5 debacle never happens again.

Draw-backs:

  • Annual fee of $699.
  • Some places don’t take American Express (which is why I won’t be cancelling my MBNA card)
  • Strict income and credit requirements to qualify for the card.

 Why the American Express Platinum card makes sense for me

- I travel a ton, both for work and for pleasure. This results in a lot of hanging out in airports, lots of hotel stays and lots of car rentals. I’m no jet-setting executive, but it adds up.

- When I travel for work, I stay at hotels like the Four Seasons and it’s not unusual for me to extend my stay at these places with some vacation days. While I could pick out a hostel or even a budget hotel wherever I am, I usually splurge and stay at the luxury hotel I’m already at. YOLO!

- I’m way more about enjoying my money than hoarding it, so I’d rather opt for a perk like a hotel room upgrade in lieu of a cash-back program, even though I’d never actually pay out of pocket for a room upgrade (does that even make sense? whatevs.)

The math:

$699 annual fee - $200 travel credit = $499 of rewards required to be obtained every year to break even on the card.

If I spend $3,000 on the card in the first three months I’ll receive 60,000 points, which translates directly into 2 round-trip tickets within Canada or $500 in gift cards at stores like Coach or Banana Republic. I will not disclose how much I’ve spent at those places in 2012 but rest assured, it’s more than $500.

In short, the card will pay for itself the first year.

… but I’ll need to keep track of my usage and the rewards I get from it to see if this will be a long-term relationship. If the perks are not with the price, I’ll cancel the card so fast Amex won’t know what hit them, but for right now, I stand to reap some cool rewards.

Investing in an MBA

I occasionally mock graduate school in a good-natured way, so it might come as a surprise to you that I do actually think it can be a worthwhile investment for the right person. At this point, I’m feeling pretty happy with my BSc., though I’m not sure if it’s all I’ll ever need to get me to the career (and salary) I want. At this point, I’m not in the mood to pursue any more formal education, but that’s a decision that my mind can be changed on.

While a few of my friends are doing PhDs and medical school and law school, the greatest number are enrolled in MBA programs. There seems to be a pretty broad spectrum of MBA programs you can take, from finance to environmental consulting, and the compensation doesn’t seem to be a bad deal either. I didn’t know what an MBA grad made but I got curious once I met a dozen people pursuing the degree.

According to Forbes, the starting salary for an MBA graduate is $101,778 + a signing bonus of $18,139 for an average total compensation of $119,917

Good thing, because the cost of an MBA is in the neighborhood of $100,000 even though it’s usually only a 1-2 year program. Not to mention that’s also 1-2 years out of the workforce (unless you study part-time, which extends your degree) which translates directly into $50,000 to $100,000+ in lost income, depending on your current job.

While I think completing an MBA part-time is an attractive option, I’d much rather just go into it full-time, finish as quickly as possible, and enter the workforce as soon as I could at that $120,000 starting salary. Then I think about living as a student and going back into debt again and I start to feel a little sick. There are, of course, ways to keep your costs down such as getting your employer to pay for some or all of the costs (particularly if you’re studying part-time) and saving by print your MBA thesis at doxdirect.com, but chances are, unless you’ve saved up six-figures of cash, you’re going to graduate in the hole. Nevertheless, an immediate six-figure paycheque does make that easier to swallow.

Like all things, it probably depends what school you attend. While I’m confident an MBA from Harvard Business School will secure you a >$100,000 in compensation, I’d encourage you to avoid online degrees from questionable, never-before-heard-from “universities”.

While I am very debt-averse, I do believe in borrowing (responsibly, of course) for your education since it means investing in an income-generating asset. Student loans aren’t that much fun, but earning more money over your entire working lifetime is, so I think if it’s your only option to pay for school, it’s a worthwhile investment to make.