personal finance makeover in 2008 - Page 2

gte · 01-11-2008, 07:48 AM

Since you mention that your problem isn't debt, I'm assuming that you don't have credit card debt hanging over you at high interest rates. Since you always have plenty in your checking account to be able to take cash out whenever you need it, I think you need to make it more scarce, so that it will force you to pay attention to how much is going in and out of your account.

I think the best way to do that is to sign up with your payroll department to have them deposit part of you paycheck into your checking account, but to have part, maybe 5% or 10% to start, to be deposited into another account, whether that's your 401K, a Roth account at a brokerage, or an online savings account, like ING Direct.

You mentioned that financial organization is one of your goals. You might want to look at buying Quicken and using it download account activity from your bank. However, since going from not balancing your check book and not depositing checks to tracking every penny is a big leap, so that's why I'd start with just making cash more scarce by not putting it into your checking account to begin with.

rolltimer · 01-11-2008, 09:34 AM

You may need to just start small and work up to the makeover. Pick a savings goals --$500 in 5 months--and start working toward it. When you reach that goal, start another goal--build up that emergency fund so many PF writers talk about. While you are working on concrete savings goals, start tracking your spending. Write down every purchase in a small notebook you carry with you. At the end of the month, total what you've spent into categories--rent, utilities, food, clothing, transportation, etc. At the end of 6 months, average up the categories to see what you are spending where. See if you can spot the trends that may be leading you into financial trouble--mindless shopping for things you don't really need, eating out too often--and also look for ways to save in every category. Continue to read and learn about personal finance, what has worked for others, and set financial goals for yourself. Could be as simple as having X dollars in your savings by the time you are Y age.

Gootsy · 01-11-2008, 11:28 AM

I agree with the small goals and working to bigger ones.

For me, my first goal was 1000 bucks towards emergency fund. This # is nice and round, the interest isn't that great, but it's a good start. It's also not that hard to get.

Then from there, I went to 5k as my goal. Another good amount. Even if you put it in an online savings account, you'd get 200 bucks or more a year. Now you're getting into the #s where you can visualize what this sort of investment/interest can get you (even with it sitting in a savings account).

Now my goal is to get a 10k emergency fund. I'm catching up to it surprisingly fast. And at this point I am really starting to think about where the money should go after this.

And after that... 25k which's my long-ish term goal. I like this amount, since even if you put it in a 4 percent online savings account, you'll get 1k a year interest. Of course I don't intend on doing this. But when you think about it, 1k just from interest a year is pretty drooltastic. Especially when you consider that's where I started with my first goal...

Should add that while doing this, I'm also putting some money (a relatively small amount since emergency fund is priority) directly towards retirement.

rstlne · 01-14-2008, 01:44 PM

The absolute first thing you need to do is to start keeping track of where all your money goes. I've used Quicken for years to do that but almost any accounting software or even a spreadsheet you create yourself will help. I set up accounts and categories and enter all transactions as they happen. Once you have a clear picture of your month-to-month finances, you can start looking for places where you can cut expenses or improve cash flow.

Rebecca · 01-14-2008, 03:05 PM

There actually are Dummie Guides for personal financing - in fact I had bought one that was specifically targeted to people in their 20s. Of course, if I'd read it I wouldn't be in the mess I'm in now. But it's a good basic guide telling you the things you should be doing now so that you don't end up in debt. It's also a good benchmark to how much of your income should go towards what and how to start saving.

JoshuaSBK · 09-15-2008, 09:59 AM

I'll have to agree. I work with ShoreBank, and if you're looking for a good savings account you may want to check them out. They're offering a 3.5% High Yield account to their online customers. There are no monthly fees and you can have 24/7 access to it -- so you can watch it grow! Plus, they make it really easy to link up your other accounts to you can make transfers with ease. It's pretty un-complicated and a good place to begin if you're looking for a way to move down that road to financial independence.

Plus, they have an amazing social mission which really makes you feel good about investing your money with them. Check out what they did with the the Umoja Student Development Corporation in Chicago. They help economically disadvantaged students prepare for the future and to help out their local communities.

01-11-2008, 07:48 AM	#11
gte Junior Member Join Date: Jan 2008 Posts: 1 Reputation: (10)	Make cash scarce Since you mention that your problem isn't debt, I'm assuming that you don't have credit card debt hanging over you at high interest rates. Since you always have plenty in your checking account to be able to take cash out whenever you need it, I think you need to make it more scarce, so that it will force you to pay attention to how much is going in and out of your account. I think the best way to do that is to sign up with your payroll department to have them deposit part of you paycheck into your checking account, but to have part, maybe 5% or 10% to start, to be deposited into another account, whether that's your 401K, a Roth account at a brokerage, or an online savings account, like ING Direct. You mentioned that financial organization is one of your goals. You might want to look at buying Quicken and using it download account activity from your bank. However, since going from not balancing your check book and not depositing checks to tracking every penny is a big leap, so that's why I'd start with just making cash more scarce by not putting it into your checking account to begin with.

01-11-2008, 09:34 AM	#12
rolltimer Senior Member Join Date: Dec 2007 Location: Alabama Posts: 131 Reputation: (24)	Makeover Sounds Too Draconian You may need to just start small and work up to the makeover. Pick a savings goals --$500 in 5 months--and start working toward it. When you reach that goal, start another goal--build up that emergency fund so many PF writers talk about. While you are working on concrete savings goals, start tracking your spending. Write down every purchase in a small notebook you carry with you. At the end of the month, total what you've spent into categories--rent, utilities, food, clothing, transportation, etc. At the end of 6 months, average up the categories to see what you are spending where. See if you can spot the trends that may be leading you into financial trouble--mindless shopping for things you don't really need, eating out too often--and also look for ways to save in every category. Continue to read and learn about personal finance, what has worked for others, and set financial goals for yourself. Could be as simple as having X dollars in your savings by the time you are Y age.

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
The one sentence personal finance book summary.	Will	Personal Finance	8	02-01-2008 08:54 AM
Personal finance privacy - when relatives pry too much	soupkitchen96	Personal Finance	13	01-01-2008 08:07 PM
Hardcore personal finance captcha	Will	Bloggers Corner	5	12-30-2007 08:47 AM

01-11-2008, 11:28 AM	#13
Gootsy Senior Member Join Date: Jan 2008 Posts: 252 Reputation: (24)	I agree with the small goals and working to bigger ones. For me, my first goal was 1000 bucks towards emergency fund. This # is nice and round, the interest isn't that great, but it's a good start. It's also not that hard to get. Then from there, I went to 5k as my goal. Another good amount. Even if you put it in an online savings account, you'd get 200 bucks or more a year. Now you're getting into the #s where you can visualize what this sort of investment/interest can get you (even with it sitting in a savings account). Now my goal is to get a 10k emergency fund. I'm catching up to it surprisingly fast. And at this point I am really starting to think about where the money should go after this. And after that... 25k which's my long-ish term goal. I like this amount, since even if you put it in a 4 percent online savings account, you'll get 1k a year interest. Of course I don't intend on doing this. But when you think about it, 1k just from interest a year is pretty drooltastic. Especially when you consider that's where I started with my first goal... Should add that while doing this, I'm also putting some money (a relatively small amount since emergency fund is priority) directly towards retirement.

01-14-2008, 01:44 PM	#14
rstlne Senior Member Join Date: Jan 2008 Location: New Jersey Posts: 364 Reputation: (115)	The absolute first thing you need to do is to start keeping track of where all your money goes. I've used Quicken for years to do that but almost any accounting software or even a spreadsheet you create yourself will help. I set up accounts and categories and enter all transactions as they happen. Once you have a clear picture of your month-to-month finances, you can start looking for places where you can cut expenses or improve cash flow.

01-14-2008, 03:05 PM	#15
Rebecca Member Join Date: Jan 2008 Posts: 96 Reputation: (32)	There actually are Dummie Guides for personal financing - in fact I had bought one that was specifically targeted to people in their 20s. Of course, if I'd read it I wouldn't be in the mess I'm in now. But it's a good basic guide telling you the things you should be doing now so that you don't end up in debt. It's also a good benchmark to how much of your income should go towards what and how to start saving.

09-15-2008, 09:59 AM	#16
JoshuaSBK Junior Member Join Date: Sep 2008 Posts: 2 Reputation: (10)	I'll have to agree. I work with ShoreBank, and if you're looking for a good savings account you may want to check them out. They're offering a 3.5% High Yield account to their online customers. There are no monthly fees and you can have 24/7 access to it -- so you can watch it grow! Plus, they make it really easy to link up your other accounts to you can make transfers with ease. It's pretty un-complicated and a good place to begin if you're looking for a way to move down that road to financial independence. Plus, they have an amazing social mission which really makes you feel good about investing your money with them. Check out what they did with the the Umoja Student Development Corporation in Chicago. They help economically disadvantaged students prepare for the future and to help out their local communities.