I’ve never felt like I’m good with money. But, since graduating from college almost a year ago now, I’ve had a handful of both peers and elders tell me that I evidently have a lot going for me in the financial management department. I think part of it is understanding where your money goes and limiting what I like to call ’silly spending’ and another part of it is using some amazing technologies as tools to manage your life.
In order to understand where your money goes, I recommend Mint.com, which is an amazing tool that provides comprehensive graphs and monthly statistics of where your money is going. You can understand exactly how much money you’ve been wasting away on cheap beer and designer shoes. Then, you can eliminate that ’silly spending’ and start putting that into some savings, so you can eventually afford to spend your money on expensive liquor and lavish lounge furniture. Aside from online tools, find a simple MS Excel template online for you to put together a budget and see to it that you don’t live outside your boundaries. Print out that budget to make sure that you see it and are aware of your spending, and it’s not hidden in some folder on your computer next to all your illegally downloaded episodes of “Two and a Half Men.” I don’t know what’s more disturbing: you hiding your budget after you make it so you can avoid it, or owning episodes of that awful show.
The first thing I did when I got into my career was look into setting up a savings account (the best I could find on the net at the time was with ING Direct) that wasn’t something I felt like looking at every day. I setup a recurring routing of money from my checking account to the savings account following every paycheck I receive to my checking account and then forgot about it. Looking at that account 9 months later, I couldn’t be happier. I don’t spend the money, I know it’s there, and it’s growing in a way I can rely on, without having to worry about the economy’s condition too much. Make sure you pick a bank to save with that sounds like it may not be eliminated in the next 6 months. I have the option to take out my money whenever I want (to move to a better savings opportunity or spend it on something I feel worthwhile) and there are no minimums or maximums.
I also rarely use a credit card. While it is good to build your credit and great to make your expensive purchases on credit card, I make my day-to-day spending on a debit card that provides a comprehensive amount of account information online for me to actively follow transactions online. I have one debit card and one credit card. Don’t get suckered into getting 50,000 credit cards from all your favorite companies in an attempt to own all of the coffee in Starbucks or get free weekly shipments from Banana Republic, but if you do a lot of spending at one, that might be a great opportunity to gain some points to do some extra damage at your favorite store. I enjoy American Express’ points program that gives you limitless choices to spend your points on. Credit cards are a great idea though, if you have somewhere you can put your money that would earn better value before you spend some of it to pay off your credit card bill.
In terms of tips to just watch what your spending, try not to dine out more than once a week. You’d be very surprised what impact dining out and drinking can have on your checkbook. That’s a quick way to make a huge impact on the amount of money you have. In terms of savings, make sure you check up on things every few months to ensure your money is making the most value of itself in a savings account with good return.
Like I have said before though, I am most certainly not an expert on finances. These are just some of the personal techniques I have used that I have found work really well for me. Please share your ideas here, so myself and others can benefit from the forum of those that have conquered financial problems of their own and have come to learn the best way to go about dealing with them. Or, if nothing else, learned what NOT to do.
[...] Launching Your Finances [...]
common sense – we seem to have lost it in this country. spend less than you earn, watch where your money goes, save part of your paycheck right off the top. finances are not that difficult. glad you know/learn early – i was the same, many others were never taught – i believe finances should be a required course in high school – learn how to balance a checkbook, how to save, how to budget – real life skills.
Mikita,
I completely agree. I have felt for a long time that they should have some mandated education in high school before Mommy and Daddy (who potentially got us in part of this mess) teach them the wrong way to do things. It is common sense, but many people don’t have that education. In fact, we don’t really provide that education, no matter how rich or poor you are. And more often than not, those that are rich handle their money more poorly than those without. Thanks for your great comment!
Trent
They say the more you read, the wiser you are. It’s apparent, Trent, you read plenty – either online or paper. I wish more spenders would realize what you seem to have been born with here. For some, it takes years of mistakes and increasing interest rates to realize how deep under they are in their finances. I cannot even begin to imagine the stress that comes with that realization. For me… I only had a few years of making financial mistakes before something knocked some sense into my checkbook and my head.
It’s ironic how high school doesn’t require any type of financial preparation education, not even a class but a presentation or speaking event at minimum. Kids are taken from high school into what is known as the most “FUN TIME” you will ever see in your years. Well what trails those “FUN TIMES”… heavier spending, self responsibility, and tracking where you put your wallet imprint on things that may not be so practical. A good example of a missed step in the financial ladder = after living in the dorms freshman year, kids mainly buy or rent a house/apt/room. Wouldn’t it be wise to prep on finances prior to making this first huge decision for yourself in terms of where and how to spend your money on the most common necessity in life = your home?
As you know, I can go on and on here, but won’t. I appreciate you publicizing this article as many of your readers will either agree, have a wakeup call, or send on to their friends and begin doing some financial planning for their own lives.
The earlier you catch your mistakes and bad habits – the easier, exponentially, it is in time to correct those errors. Nice work sweetie <3
Annuelle,
Do you have to end your posts with “sweetie”? It shows your bias and gives away that 1 out of 2 of my readers are dating me.
Kiddingly Yours,
Trent
Good thoughts. Check out SmartyPig (http://smartypig.com/) for a good (3%!) high-yield savings account. Some other random advice
-If your company offers a matching 401k, do it! It’s free money
-I still recommend that people use a credit card for all their purchases, as long as they pay it off at the end of each month…it’s the easiest way I’ve found to build credit quickly…just be sure to pay it off every month (and never be spending more than 30% of the total credit limit, or it will actually hurt your credit)
-Mint.com has a budget feature, but I like the idea of printing one out
Good job pookie <3
well, I believe everyone should take all of their money and buy into Bank of American, Citigroup, and AIG. I mean we all know are money is safe with them. And if all else fells the government will bail them out. That is my retirment plan. JK Good article Bro =) so now you have three readers the girlfrined, some andom person that tyoped in the wrong web site, and me. lol
Just wanted to say that I’m so glad I heard about Mint from this post… and I told some friends and they love it too!
And since I’m not dating you and I read, now it’s at most 1/3 of your readers.