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Thread: Money management

  1. #1
    God/dess Zofia's Avatar
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    Default Money management

    We have had a number of threads about money management and savings. I adapted this list from a discussion I had with my 15 year old daughter. Here is what I suggest as a plan, in order:

    1. Track your income and spending for 60 days. Track every penny of income, and every single expense. There are online spreadsheets like Mint.com. Or, you can use your own spreadsheet. Whatever, just do it. Once you have a good 60 day track, start cutting things that are not useful or just flat out wasteful. Then make a budget and stick to it. You will have probably 10% of your income once you start seeing what you spend and what you don't really need to spend.

    2. Save up at least $1,000 and put that aside in an emergency fund. BF and I have a whole year in our emergency fund. But, we keep some of it in a savings account that we label "emergency fund." The rest is in Certificates of Deposit. (None of these funds really yield much income, but that's not the point. We just need access to cash.

    3. Take advantage of any employer offered retirement matching funds. Nowhere will you earn more with no risk than the employer match. Be smart, invest at least enough to get the full employer match. If you are self-employed, you can do something similar with a SEP 401K

    4. Pay off all high interest debt. I say anything over 5% interest is high interest. Pay it off as quickly as possible. There are two strategies: avalanche or snowball. Either one works, avalanche will cost you less. But, snowball has positives too.

    5. Invest in yourself. Educate yourself. Buy books, take a class to improve your skills, take a class to add new skill[s]. Learn something to help you make more money.

    6. Invest in a Roth IRA.

    7. Invest in taxable accounts/investments. I used to like individual stocks, but I just don't have the time to follow too many businesses. Now, I just invest in index funds. The returns are very close to the market and the costs are very low. Also, index funds routinely beat the best hedge fund managers.

    HTH
    Z


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    Default Re: Money management

    This is great advice. If you would like to speak to a professional for a complimentary consultation, click here -->

  3. #3
    God/dess Zofia's Avatar
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    Default Re: Money management

    Well, it's February and our big spending on Christmas is done. How is everyone doing on their financial goals? It might be time to track our spending again and see how we are doing on our budget.

    HTH
    Z

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    God/dess Cutie101's Avatar
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    Default Re: Money management

    I am doing well with savings, since I have discovered the 10% rule. Always saving 10% of my income before anything. That way, I consider my income the 90% amount, not the 100%.
    Now I raised it at 20%.

    Buying all kind of appliances for an easier life, has helped me cooking/ brewing my coffee more at home and eating less out. Wich is a major source of money wasting. I find spending money on instant pots, coffee makers, convection ovens, good quality blenders and such, an investment for something you have for years. The average duration of an appliance is about 5-6 years.
    I learned what products are good for my skin and what match my eyes, so I don't need to try new makeup stuff everytime it comes out, or new creams.
    I usually wait to use everything till the last drop, before I restock or try something new.
    I buy my false lashes in bulk from aliexpress. $2 mink lashes are ahmazinng (I doubt they are real mink tho, but... they look natural!).
    I only buy monthly subscriptions for various things, such as Netflix. I don't have time, all the time to watch stuff, so I prefer to pay for a month, watch whatever I find interesting and then pay when I will find anything interesting again, wich may pass 2-3 months in between.
    I am always waiting for sales, even tho, it takes an year, on new collections, whether is makeup or clothing. Why to pay $80 for a makeup pallette, when sometimes, it's at $50?
    I buy laundry/ home cleaning& hygiene stuff in bulk, from warehouse type of stores every 3 months.

    Otherwise, I am not really tracking my spending vs income, as time as I am saving as much as possible. I don't like living wayy too frugal. I like to enjoy myself, I am just careful to not overspend or buy unnecessary tings.
    At the begining of the month I am just putting on a paper all the major spendings I have to do for that month (mortgage, utility bills, checking what makeup/ skincare stuff are about to end, etc).
    In the months when I am making more, I make sure I put aside 30% or even 50%, if I don't have other expenses coming.

    For now, I am not into investing, because I know nothing about, I am just focusing on savings.

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