I spend a lot of time talking to my college students about managing money. I don't have much. I'm a schoolteacher. But that's OK. I don't want more than I have. I'm not greedy. Just conscientious.
You need to know how much you earn before you can determine how much you can spend. That's budget-writing at its core. You must have more money coming in than you have going out. Plain and simple. If you aren't making enough money, get an additional job. I work three or four jobs at any given time. I'd put on a minimum wage job if I had to. Couldn't you see me as a Walmart greeter? "Hey! Welcome to Walmart! How the fuck are you? We got the lowest prices in town, and we only have to bend our employees over once a month to make that happen. We call that payday."
Look, I know there are people out there fortunate enough not to have to worry about money, but for the rest of us average-Joes, who probably grew up in blue collar households (my father's a bad-ass trucker), we don't have money to burn and these struggles are real.
My wife and I take a look at our finances at the start of every year. It's easy because we're on winter break then. We project our yearly income and then guesstimate our annual expenses. This second part is a general survey of what we expect will cost us. Where are we traveling? Does our home need any improvements? How much are we hoping to fold into our savings account (never enough)? Those kinds of questions. We also plan a very detailed monthly budget. We list every recurring expense that we can possibly think of (even down to the cost of trimming this ever-thinning hair of mine) and then add some cushion for whatever we can't expect. We create general groupings for these expenses (groceries, eating out, entertainment, etc.) using envelopes and drop in enough money to last each month. If the cash runs out, we don't spend anything. You'll be surprised how far a case of spaghetti bought at Costco will go when there are five weeks in a month. We also have a Christmas envelope for our 52-week savings plan. That nets us over $1300 for the holidays.
A few other thoughts. We save for the kids. They each have a college 529 plan. We've put away every dollar they've ever gotten as gifts in their own bank accounts, and we make them balance their monthly expenses with income they earn for working around the house. We only use credit cards for fuel and medicine but never carry a balance. You'll be surprised how fast your credit score goes up when you pay off your bills on time (we're at 833!). Make sure your credit cards give you cash back. I've used Discover since I was a first-year teacher, and my reward month is December (just in time for Christmas). Another trick is to take 0% interest loans for big-ticket items. If a bank is willing to give you free money, take it for as long as they'll give it. This applies when buying a new car, TV, furniture, or anything else you might catch on special at Lowe's Home Improvement.
A final note. I've grown to resent tax-sheltered/tax-deferred investments as I believe they only work for the rich and benefit the corporate broker. I hate not having access to the money I've put into my IRA or my 403B. I don't make enough (and consequently can't put away enough) for those savings to matter when I'm old and retired. I'd rather pay the taxes up front and invest in mutual funds or stocks that I can cash out whenever I need the money. But this won't apply to everyone. That's just me. I'm a public schoolteacher and will have a solid pension when I retire. If I don't, I'll work until the day I drop dead. And that's just fine. It's how my grandfather went down. I'm named after him, so it'll be fitting. Plus, I was born on a Saturday, and Saturday's child works hard for a living.
No comments:
Post a Comment