Financial Thread

[NATEizKING]

So I have been reading a lot of financial books and articles over the past year after getting hired at my current job, buying a house, getting engaged, but there are still a lot of financial questions I have that I would like to get people's advice or opinions on.

At first, I was pretty worried about bills and timings of paychecks to those bills, kind of overwhelmed by how much I owed in student loans and making sure I could afford the new house payments, ring payments, retirement, fell off daddy's healthcare, and wedding savings while still putting extra towards loans. After about 6 months, and especially after the year of ring payments to pay that off, I have become a little too comfortable with my situation and don't really pay attention to how much I'm spending at times on food, entertainment, beer.

I understand budgeting but it's not really for me as I'm not an impulse buyer and know how much I have left after bills each month.

So my question for today is, how do you keep motivated to monitor what you are spending and how often do you review your financial situation?

 

[Cyclonepride]

My wife is a bit of a tight ***, so this situation just takes care of itself. Is it worth that look? Nope.

 

[Mtowncyclone13]

I have a spread sheet and I update it on the first of every month. It lists my hard assets, retirement assets, stocks, etc as well as any debts I have. Then I crunch the numbers to see how much my net worth went up or down that month.

As for budgeting - we don't budget because all of our bills and savings come out of the account automatically so whatever is left over is what I have to spend on everyday stuff.

 

[carvers4math]

I'm no financial expert, but I guess I feel like anything extra you can throw into the retirement account when you are young turns into a huge payoff.

 

[CornFedIABoy]

If it's a concern there are a number of apps (integrated for desktop and mobile) that can help you keep track of where you're at. Some allow you to set yourself a daily discretionary spending budget and provide immediate information on your smart phone to help you keep on budget.

 

[cowgirl836]

Mint.com.


Set up budgets, set up goals. It'll show nice little progress bars for each. Like food - if you say you're spending 250 on food for the month, it'll turn green, yellow, then red as you get close to and exceed the budget. I like it a lot. For goals it will show whether you are ahead or behind.

 

[BikeSkiClone]

I keep a budget in Excel. Every purchase/expense is recorded and every incoming dollar accounted for. My income varies month to month, so I can't just say "I'm receiving $3k this month, have $1.5k in expenses, and therefore have $1.5k remaining for variables" (not my real numbers...not even close, sadly)

I can plug in my fixed expenses for the month and see how much I would have left at the end of the month if no income was earned. As paychecks come in, that end-of-month number goes up and when purchases are made, that number goes down. It also gives an idea of what I'll have to work with the following month. It works for me. I've been doing it for just over a year now and it's been helpful is realizing where I spend a lot of money (on dumb stuff...daily convenience store stops, excessive times eating out, non-essential purchases, etc) and I've cut back a lot.

I've had mint.com and similar recommended to me, but I feel like I have more ownership and accountability over the process doing it on my own on Excel.

 

[FarminCy]

I have a spread sheet and I update it on the first of every month. It lists my hard assets, retirement assets, stocks, etc as well as any debts I have. Then I crunch the numbers to see how much my net worth went up or down that month.

As for budgeting - we don't budget because all of our bills and savings come out of the account automatically so whatever is left over is what I have to spend on everyday stuff.

We are the pretty much the same except I use Quicken.

All of our accounts are linked in to it and we categorize everything. We don't really budget but I do look at what our spending trends are etc per category.

At the end of every month whatever is left in our checking account get automatically put into savings, ira, etc. I'm sure we could do better at it but I just don't pay all that much attention to it. Our retirement resides in dirt and that is worth way more than anything that we could try to save hence why I spend much more time on those financials.

 

[dmclone]

So I have been reading a lot of financial books and articles over the past year after getting hired at my current job, buying a house, getting engaged, but there are still a lot of financial questions I have that I would like to get people's advice or opinions on.

At first, I was pretty worried about bills and timings of paychecks to those bills, kind of overwhelmed by how much I owed in student loans and making sure I could afford the new house payments, ring payments, retirement, fell off daddy's healthcare, and wedding savings while still putting extra towards loans. After about 6 months, and especially after the year of ring payments to pay that off, I have become a little too comfortable with my situation and don't really pay attention to how much I'm spending at times on food, entertainment, beer.

I understand budgeting but it's not really for me as I'm not an impulse buyer and know how much I have left after bills each month.

So my question for today is, how do you keep motivated to monitor what you are spending and how often do you review your financial situation?

I'm big into automatic withdrawals.

For example, I have multiple checking/investment accounts. One is for bills, one is for savings, one is for daily expenses. So lets say after everything(401k, employee stock, taxes, insurance, etc) is taken out of my check I make $1,000 month.

$300 automatically goes into savings account that isn't easily accessible (hidden ATM card).
$400 goes into checking account for bills. All of my bills except one are automatically taken out.
$300 goes into a spending account that we use for day to day expenses like groceries, gas, entertainment, etc.

With this plan I know that I only have $300 to spend and if I run out then I won't eat.

These are not real numbers.


A couple of times a year(once after a pay raise) I re-analyze the situation and adjust accordingly. I also have a excel spreadsheet that I fill out once a year that gives me a line by line breakdown of my big assets and liabilities to give me a general idea of my net worth. I've been doing this since 2008 and wish I had done this my whole working career.

 

[FarminCy]

I keep a budget in Excel. Every purchase/expense is recorded and every incoming dollar accounted for. My income varies month to month, so I can't just say "I'm receiving $3k this month, have $1.5k in expenses, and therefore have $1.5k remaining for variables" (not my real numbers...not even close, sadly)

I can plug in my fixed expenses for the month and see how much I would have left at the end of the month if no income was earned. As paychecks come in, that end-of-month number goes up and when purchases are made, that number goes down. It also gives an idea of what I'll have to work with the following month. It works for me. I've been doing it for just over a year now and it's been helpful is realizing where I spend a lot of money (on dumb stuff...daily convenience store stops, excessive times eating out, non-essential purchases, etc) and I've cut back a lot.

I've had mint.com and similar recommended to me, but I feel like I have more ownership and accountability over the process doing it on my own on Excel.

When we started tracking I was shocked at how much money I wasted at Casey's, etc.

 

[NickTheGreat]

Stop talking about "payments."

Less debt = more money.

If you can't afford it, don't buy it. An exception for a house, and school (to a lesser extent).

 

[jtdoyle1]

I use mint.com to help keep track of spending, budgeting, assets and debts.

Sometimes I feel that the word "budget" gets a bad wrap. Remember that budgeting doesn't mean that you aren't spending money a budget is just a plan on how you are going to spend your money.

The first few years after I got married I was similar to what you talked about. We are pretty conservative spenders and always shad enough money to get by, but at the end of the month I would see the credit card bill and think we really spent that much going out to eat???

Now I've set up a monthly financial spreadsheet with all of my monthly bills and possible expected and unexpected costs then made categories like entertainment, groceries, gas, car maintenance, etc. or savings goals (i.e. retirement, vacation, new car) that I would like to meet and it just helps me think about what I'm doing with my money so I really don't have to worry when the unexpected comes up.

 

[2ndCyCE]

I use an excel budget spreadsheet to track my income and spending. At the beginning of every month, I input how much I expect to spend on each category (food, transportation, entertainment, student loans, etc.), and then I keep track to the nearest dollar on where my money goes.

After a month or two of doing this, it becomes easier to tighten the budget down in certain categories like food (buying groceries instead of eating out) and entertainment (having beer with friends at home instead of the bar). Allocate the money you save towards your most critical debt.

This method helped me knock out $25,000 in debt in a little over 2 years, and now I have been able to significantly increase my contributions toward retirement and other investments, which I hope will lead me to reach my retirement goal with a lot less anxiety.

 

[yler4cy]

I have multiple accounts as well, but 1 is specifically for all my routine monthly bills. i.e. Car Payment, Cell, Internet, Mortgage, etc. Then each pay period I have the amount I need to pull out to make those bills. Ofcourse my Utilities change from time to time, but I just go ahead and budget that on the high end and then I know that I always will have extra in there. I also have an account for larger 1 to 2 times a year account. The stuff that comes out of this is: Football Tickets, Bball tickets, 6mo car insurance, life insurance, etc. I just pay an established monthly amount into that to make sure I meet the cost that is needed. Once I got those 2 setup it made everything pretty easy. I track every bill that comes out of each account to make sure I am going to have enough. Then the rest goes into 1 account where that money is used between my wife and I. Also, we, wife and I, have 2 separate accounts for personal spending money were we get an established amount each pay period to spend on whatever. It just makes things easier I think.

Honestly I can share with you the spreadsheet I do have if you would like?

ALSO, I would highly recommend setting up a gmail account. I use the google drive to access that spreadsheet, so I can access it from any computer. It makes it handy to use.

 

[cycloneworld]

I understand budgeting but it's not really for me as I'm not an impulse buyer and know how much I have left after bills each month.

So my question for today is, how do you keep motivated to monitor what you are spending and how often do you review your financial situation?

I'm a lot like you. I hate budgeting. I like and am fine with spending money went I want to and on things I want to without a budget telling me I can or can't. But I'm not an impulse buyer either. What works for me: I decide how much I want save over a given year. I live my life budget-free and each month I look at my accounts in total and see how much went in and how much went out. If I'm on track to hit my yearly savings goal for that month, I move on. If I'm ahead of goal, I move on. If I'm behind on a particular month, I dig into why (vacation, ate out too much, etc) and if its a "valid" reason like a planned vacation, I move on. If its something like we ate out too much, I'll be conscious about it the next month and try to do better.

It's definitely more reactionary but it fits my personality and lifestyle better than creating a budget and trying to stick to it.

 

[wxman1]

I am also one that tracks everything in excel...I actually have a good budget in place a year out.I do it broken down by week. Carry over what is left on Friday then subtract all the bills, groceries and car gas...repeat...every week.

Some people hate him but I am a big Dave Ramsey guy and I highly suggest you at least get a copy of The Total Money Makeover if not you both attend FPU. Once you get past his political beliefs it is really good stuff and sadly it is common sense. We don't follow it to a "T" so to speak but use the principles.

It is all self control...lttle things add up. There is always something to do, buy or donate to but it all costs money.

 

[cycloneworld]

Stop talking about "payments."

Less debt = more money.

If you can't afford it, don't buy it. An exception for a house, and school (to a lesser extent).

In general, I agree. Although there are times went cheap debt isn't bad. Financing an engagement ring at 0% for a year, buy furniture at 0%, a 1-2% auto loan...that's smart debt IMO.

The biggest piece of advice I could ever give: NEVER keep a balance on a credit card. You are throwing (lots) of money away. I use credit cards every day but always pay them off each month. If you can't pay it off at the end of the month, don't make the purchase or use card.

 

[DurangoCy]

I echo the spreadsheet sentiment. I didn't do it the first few years out of college and wasn't making the traction I wanted, probably due to my income being lower. However I was also spending a lot more on booze, eating out, vacations, and gear.

I started a spreadsheet with all of my IRAs, Checking, Savings, Loans, etc. and updated it every month. It's pretty cool to see that number up 70k in a couple years, and certain columns (credit and house 2nd) go to zero.

I also track all of my bigger expenditures (Usually $200 or more) on another sheet to see what I'm spending money on over the year. I just throw Clothes, Car repairs (payments are for suckers), toys, sports equipment, trips, gifts, etc. in and list the month and cost. At the end of the year I can look at see where my cash went and compare year over year numbers to see if I was an idiot or not.

It's also pretty easy to see if I'm over spending from month to month and when I afford to splurge or need to cut back.

Step 1 - Know where your money is going.

 

[dmclone]

In general, I agree. Although there are times went cheap debt isn't bad. Financing an engagement ring at 0% for a year, buy furniture at 0%, a 1-2% auto loan...that's smart debt IMO.

IMO no item that loses money and you have to get a loan to buy is smart but that's my dumb opinion.

 

[scottie33]

I create a month-to-month spreadsheet of our income and necessity payments (Food, Transportation, Daycare, Student-Loans, etc.) and use that to figure what we have left after all these are accounted for. This surplus can be used for entertainment, clothing, or even if we go over on our necessity payments. The balance at the end of the month typically always goes to Student Loan payments.

I also do a future budgeting exercise to see where we are with expecting 2nd child, possible pay increases, paying down student loans, etc. to look out 2-3 years.

I will also add that we have paid down $65k in student loan debt, ring and wedding, credit cards, and outstanding car payment balances since graduation. Will be paying off an addition $27k in student loans by next July while saving up for down payment on new house. I HATE STUDENT LOANS!