I read this article by Suze Orman the other day and it really made me take stock of my finances. Besides that, it feels like everyone I know is buying houses recently while I continue to waste money on rent. Not that I even know where I’d want to buy a house at this point but I would like to own (sort of) something at some point in the near future. Any way in the article she mentions having 8 months worth of expenses saved in an emergency account before saving for anything else. I have 10% of my paychecks going into a 401K but I don’t count that in my savings since it’s not supposed to be touched until retirement, so besides that I don’t have anywhere near the emergency fund I should (according to that article, but most people say 3-6 months). I’ve been more concerned with paying off debt since I hate to have that hanging over my head and I have a whole lot of student loans. I know “pay yourself before anyone else, etc etc” but even though I don’t really count the money in my 401K as real money, I was using that as my paid myself excuse. So I just set up my accounts to transfer money from checking to savings every time I get paid, around another 15%. This was after figuring out all my monthly bills and seeing what was left over and it’s more than enough to save a decent sized chunk and still have plenty to pay down debt. I just haven’t figured this all out before due to laziness. I’m young, there’s always more time to save, right? But the sooner started, the more interest made in the end.
I also figured out a spending budget to stick to so I’ll stop impulse buying. Books are probably the biggest culprit there. I even have a ton of books I haven’t read yet and there’s also the library, although granted my local library is tiny and almost never has what I’m looking for. I already try not to go into book stores because I end up with a huge pile of books in my arms before I know what hit me (but they’re from the bargain table!), not that shopping online is any easier (have to spend enough for free shipping!). So no more looking at amazon.com for me. My motorcycle was also a big culprit this past year but I have everything I need at this point so no need to buy anything but gas and oil really. I have everything I need for camping and more than enough supplies for all my other hobbies too. I don’t even go out that much any more, mostly just to friends’ houses, and I never went to restaurants very often any way since I consider that a huge waste of money, so there’s not much to cut back on there. And I’ve never been one of those people who buy clothes and shoes constantly. In fact, I hate shopping for that stuff since it usually involves going to a mall, probably my least favorite place on earth.
I’m using Mint to keep track of everything. It’s like MS Money or Quicken, but web based and free. I used to use MS Money a long time ago but my hard drive died and my backup file turned out to be corrupted so I lost all my info and got annoyed and didn’t start over with it. I had actually signed up for Mint a while ago but I didn’t really like the way it was working at the time. A lot of changes have been made since then so I like it now. They also support a lot more financial institutions so I can see all my banks, credit cards, loans, even my 401k. You can categorize and tag every transaction so it’s easy to see where your money is going. It’s even pretty good at guessing the correct category. I only had to change a few, whereas MS Money almost never got it right. And you can create rules for the ones it misses so it doesn’t miss again.
I’ve also been reading a ton of personal finance blogs. My favorite is Get Rich Slowly. That one’s been in my feed reader for a while but it was one of the blogs I never got around to reading lately. I’m mostly caught up at this point. I just added a bunch more blogs so I’ll have to get to those too. Any recommendations for blogs or books on the subject? I’ll even try to get the book at the library, I swear!