|
I've been holding off on doing this for a while because I felt my life was too unpredictable for tracking my budget - moving around a lot, a series of minimum wage jobs after graduating college, etc. However in the last month things have finally settled down and I have a steady, predictable financial situation. It is time to Adult. Please keep in mind that I've been coming out of a long term mental illness fog in the last year so there are a lot of adulting things I should know that I... don't. I want to learn and am looking for some help. Age: 24 Income: About 43k/year Assets: Fully paid off 2005 Toyota Highlander $11797.86 in the bank Debt: $34,094.88 in student loans Financial goals: Pay off loans I've created what I think is a reasonably thorough spreadsheet on Excel that accounts for daily spending. So far I have been good about entering every daily purchase I make. Image is big so I'll just link it. I set it so that every time I enter a purchase it subtracts from a rounded down estimate of what I will make that month (2400, sometimes I make a little more from overtime). This way I am always aware of how much I have to spend.  I have a row dedicated to showing how much money I've spent that day in total:  And a column showing the total of what has been spent in each category overall.  On the right side is basically a place for me to play with the budget. Same deal, when I enter a figure it subtracts from 2400.  Payroll reflects how much I actually made; it's really just a personal reference point. My plan is to disregard anything I make above 2400 and dump it into my student loans at the end of the month. I get paid biweekly. I have no credit cards. That's a can of worms that I didn't want to open until my life was well under control. My very generous parents gave me a credit card in my name for certain expenses when I was 16 and paid it off every month until I graduated from college so that I could build some credit. We cancelled it the day I graduated. I have ADHD and was unmedicated and flakey for the last few years; I didn't want to get a credit card until I knew I could be good about paying it off on time. I think I'm just about there but would like to give it a month or two. Also I just do not understand credit cards beyond the basics, so I wouldn't be comfortable with applying for one right now. I have a savings account and a checking account. The interest rate on my savings account is higher than the interest rate on my checking account (that's probably obvious) so I keep most of my money in the savings account. I don't have any banking service fees or anything like that. I haven't felt the need to open any other accounts; as long as funds are firmly allocated for X or Y they'll be used for that purpose. So if I say I have 5000 dollars in savings on a spreadsheet I won't touch that 5000 dollars unless there is an emergency. At the moment I have 10k allocated as savings. I'm pretty sure this is a lot for a childless adult with a reliable car and a stable job but the plan was to hang onto it until I moved into my new apartment because I had no idea how much moving expenses were going to add up to (new city, starting with very little furniture and few essentials). Now that I'm settled in as of last month I want to dump a portion of it into my student loans (the second smallest loan because currently the smallest loan has the lowest interest rate) but I'm not sure how much. It's really hard for me to talk myself into getting rid of that security blanket. I'm also not sure if I should put those savings towards my debt until I am comfortable with getting a credit card. My budget is... not even a good estimate, I took a screenshot and then changed things. I'm sure I will change more in the next few days. I know it is kind of stupid to start a budget thread without even having a budget ready and I'll post it when it's more accurate later, I just haven't really made up my mind on some things. Obviously next month's figures will be based on this month's figures. Renter's insurance, storage unit, and Amazon Prime are all going to go away next month as I don't need the storage unit anymore and the others are yearly expenses. I want the vape category to go away soonish (which is why I distinguished it from "blow", I wanted to see how much I'm spending on it per month), but I'm not quite ready to quit nicotine yet. Here is a snapshot of my student loans.  A, B, and C are at 6.8% and D is at 3.4%. Right now my plan is to allocate 500 dollars to my student loans per month plus anything I make beyond 2400. If I should be doing anything differently here please let me know. In the interest of full disclosure there is about 100 dollars worth of skin and hair products I purchased this month unaccounted for in this budget, but let me explain because this isn't a wonderhanger situation (I hope). At my job I have a system for making a little extra money. That sounds sketchy but all I do is book all of our catered lunches/events through a catering database and get points that I can exchange for Amazon dollars. I've desperately needed new skin and hair products for a while now. Between a new birth control I went on, a climate that my body apparently hates, and high maintenance hair that I've been growing out, my complexion kind of sucks (which is an even bigger deal for me than it would be for most people because of mental health reasons) and my hair is not great. I've been holding off on buying anything for several months to the point where I was using old baby shampoo from my MIL's house because it doesn't wreck my hair. I recently converted the points I had accumulated to 160 Amazon dollars and decided to get what I need - when you consider that 100 dollars (of Not My Money) got me shampoo, conditioner, facial soap, chemical exfoliant, moisturizer, a pound of bentonite clay and a 1/2 gallon of apple cider vinegar... I think that's not too bad, and they will last me a long time. Let me know if I'm being stupid though. I'm not sure how I should reflect this in the budget or if I should just act as though I didn't purchase it or what. Questions: Should I have unspent money carry over from the previous month into their respective categories or go to my student loans? Should annual/semi-annual expenses like Amazon Prime and car registration be budgeted in smaller amounts per month? I feel like I would rather budget for them the month they are due and just spend less in other categories because I don't know if they'll increase, if I'll renew or if I'll select a different plan/company, etc. Groceries are a weird figure because at the end of the month my partner and I will compare how much each of us spent on joint groceries and divvy up in such a way that each of us are paying exactly half. Not sure how to reflect this on the budget or if it is even the best system. Also I haven't made any distinction categorically between joint groceries and my groceries (we eat breakfast and lunch separately, I cook dinner almost every night) although I have been adding a comment for each purchase specifying what it was for. Tbh I spend very little on breakfast and lunch right now for various reasons. Either way the grocery budget is a very rough estimate as I am not from this city and still trying to figure out the cheapest places to buy produce, meat, etc. It will probably be higher this month and next month because I'm still acquiring staples (flour, sugar, spices, etc.). Retirement - my job has a 401k plan, I looked into it enough to figure out that they won't start matching until I've been a permanent employee for a year (so next May). Stopped prioritizing it after that but I need to learn how this works and figure out how much I should be contributing to it. Investments - I have some special employee benefits here and that's all I know. I have no idea if I should bother with investing until my student loans are paid off. Car maintenance - I have no clue how to budget for this. Totally unpredictable emergencies come out of savings but I am aware that I need to be planning for oil changes, tire rotations, etc. Should I allocate a number and let it stack up until I need to take the car in? I don't have a reliable auto shop where I know the prices yet. Banking - I am a Bank of America gold tier Preferred Rewards client. Are there any benefits I should be taking advantage of right now that I am not aware of/don't understand? Also is there any good reason for me to switch to YNAB? My spreadsheet seems to be adequate for my needs but I wouldn't really know what I'm missing. Any and all advice is welcome, please don't mock my ignorance too hard because I'm doing my best (but please make fun of any stupid purchasing decisions I might make). Feel free to ask me any clarifying questions. MakeItRain fucked around with this message at 00:27 on Sep 12, 2015 |
#
?
Sep 12, 2015 00:17
|
|
|
|
| # ? May 3, 2024 09:48 |
|
|
Well, as long as you can stick to spending to your budget (is that an August view?), it looks like a pretty good first draft so far. Have you had spending problems associated with having a credit card in the past? Having a credit card (don't get one with an annual fee) is generally a good idea, as long as you aren't worried it'll lead to you carrying a balance on it. A good rule of thumb for an emergency fund is 6 months of expenses, so 10k seems reasonable, especially since you don't have any ridiculous 18-30% interest rate loans (car loans or credit card debt, mostly). Your rent seems a little bit high for your income -- can you talk a little bit more about that/what general area you live in? For retirement, the rule of thumb is: 401k up to employer match, Roth IRA (up to the max of like 5-6k/yr), max 401k. WIth your income and debt I would not worry about it until May, and I would prioritize 401k up to employer match (the match is basically 100% return immediately, plus the tax break from putting in pretax money) and then spend the rest on paying down debt. For your questions: Should I have unspent money carry over from the previous month into their respective categories or go to my student loans? Whatever your preference is. If you want something that can't be covered in one month's budget for the item, you should carry excess over to "save up" for what you want, but if you don't have anything you're saving for, I'd throw it into student loans, but that's really your call. Should annual/semi-annual expenses like Amazon Prime and car registration be budgeted in smaller amounts per month? I feel like I would rather budget for them the month they are due and just spend less in other categories because I don't know if they'll increase, if I'll renew or if I'll select a different plan/company, etc. The latter is my personal preference but you can also handle it the way I mentioned above, such as by having a "subscriptions" or "yearly things" category that you save up every month and then pull from (if you don't have, for example, 100 dollars of leeway that you feel you can take out of your existing budget). The thing about budgets is that they're just tools to help you control your spending -- as long as you're meeting your savings goals and not spending more than you can afford (more than you make in a month), it's really up to you. Groceries are a weird figure because at the end of the month my partner and I will compare how much each of us spent on joint groceries and divvy up in such a way that each of us are paying exactly half. Not sure how to reflect this on the budget or if it is even the best system. Just use a ballpark estimate, maybe budget it a little bit higher to have some "buffer" room in case you guys end up spending more than you thought. If it becomes a problem that your expectations are completely divergent from what you're actually spending, you can consider doing weekly or twice-monthly check-ins instead of once a month check-ins. Investments - I have some special employee benefits here and that's all I know. I have no idea if I should bother with investing until my student loans are paid off. Don't bother. Post-tax investments are unlikely to reliably beat the immediate 6.8% "return" you get by not having to pay interest on your outstanding loans. If you have an ESPP (employee stock purchase plan) or something like that, it may be possible to buy stock at a discount and immediately sell it same-day for a profit, though? Car maintenance - I have no clue how to budget for this. Totally unpredictable emergencies come out of savings but I am aware that I need to be planning for oil changes, tire rotations, etc. Should I allocate a number and let it stack up until I need to take the car in? I don't have a reliable auto shop where I know the prices yet. Yes. Budget an arbitrary number per month (I don't have a car so I don't know what's reasonable) and save it up and then pull from the cash you've saved in your "car repair" fund whenever you need something for it. You can ask around with coworkers or friends for auto shop reccommendations.
|
|
#
?
Sep 12, 2015 01:24
|
|
|
Horking Delight posted:Well, as long as you can stick to spending to your budget (is that an August view?), it looks like a pretty good first draft so far. I started on the first of September, kind of planning/modifying as I go. Horking Delight posted:Have you had spending problems associated with having a credit card in the past? No not at all. I just have read a lot of horror stories and I am historically not great about always making payments for things on time. Horking Delight posted:Your rent seems a little bit high for your income -- can you talk a little bit more about that/what general area you live in? Bay Area. Hopefully that's self-explanatory. We are paying an obscene amount of money for a one bedroom apartment in an okay part of town. Horking Delight posted:If you have an ESPP (employee stock purchase plan) or something like that, it may be possible to buy stock at a discount and immediately sell it same-day for a profit, though? I'll look into that this weekend, thank you.
|
|
#
?
Sep 12, 2015 02:51
|
|
|
A lot of credit cards can be set up so that every month when the due date rolls around, an ACH is made from your bank account for the entire statement balance, if you're worrying about that.quote:Also is there any good reason for me to switch to YNAB? My spreadsheet seems to be adequate for my needs but I wouldn't really know what I'm missing. Responding with a personal anecdote: When I first started budgeting for myself I actually brewed up a spreadsheet system pretty similar to what you're using. It was decent as long as I had just a checking and a savings account, but quickly turned annoying as hell as my finances got more complicated and I had to set to hunting down transactions to make everything balance out properly. I eventually turned to YNAB because I was attracted to its methods for determining how much liquidity I'd need to keep in my main checking account to pay bills and what could go to savings without causing any overdraft concerns. It turned out to be really, really good for that, and also for making sure that my budgeting was staying complete and accurate. Transactions can fall through the cracks if you're using a spreadsheet system to record stuff, and you can run into situations where you're not sure whether you've actually recorded a transaction, as well as other annoyances. YNAB has a very good account reconciliation function for that, and is very good at handling multiple bank/credit card accounts. I find it to be more irritating for trying to track brokerage accounts like an IRA or ESPP, since it doesn't scrape market activity, but other than that I've had nothing but good experiences. Oh, and the spend-last-month's-income YNAB rule is amazingly effective for managing any irregularity in an income stream. Another budgeting program you could try if you want is Mint; it's a free online service from Intuit that runs on ads for mostly banking/investment poo poo from what I've seen. It scrapes transaction data very effectively from online banking and investment sites, meaning it'll read all the transaction activity from your bank account automatically and categorize the transactions as best as it knows how, and you can correct categories as necessary. Though I'm less satisfied with its budgeting tools than I am with YNAB, I think it's still a viable free alternative if spreadsheet budgeting gets to be too much of a headache. It has decent mobile apps, provides weekly/monthly reports, and has a lot of other neat little tools/features. One last point I wanted to raise, too: What interest do you get on your savings account? If you have $10000 in there you may want to look into whether you can get a better return; most savings accounts have poo poo interest nowadays from what I've seen but a few banks offer up to about a percentage point, which isn't anything to sneeze at on a balance like yours. Pittsburgh Lambic fucked around with this message at 05:39 on Sep 12, 2015 |
|
#
?
Sep 12, 2015 05:33
|
|