How to Conquer Your Finances

by Frank Martin

Growing up I never thought about money. What kid does? As an adult, my monetary habits have been a semi-mess. Like it or not, as adults we can’t afford to act like money is a limitless resource, so I’m getting my act together.

Tips for monetary well-being:

  1. Don’t carry cards: They make spending too tempting. Limit or eliminate credit card use. Don’t carry one, and don’t set it up to be charged anywhere online. Set a monthly limit you can afford and pay it off monthly.
  2. Carry cash: Give yourself 40-60$ in pocket money a month, and withdraw it from your account at the beginning of the month. Save the change and deposit it into the short terms savings at the end of each month along with any remaining spending money.
  3. Have short and long term savings accounts: Use the first for large purchases. Have a goal for this money. The long term is an emergency fund. Make it hard hard to get to by opening it at a different bank. Its best if the long term account has a high interest rateand low minimum balance. Even if you manually deposit into the short term, the long term account should be an auto-deposit. Set it and forget it, you should be only marginally aware of this account until you actually need the money.
  4. Budget: Figure out how much you owe in bills. Assume it doesn’t exist when accounting for necessities and pocket money. I highly recommend learning about money management and finding a related podcast you enjoy. I’m a Dave Ramsey fan, but he might not float your boat. (he’s Christian and teaches biblically based finances. This doesn’t bother me, but it might not work for some people).
  5. Cancel services: Unless somehow necessary for your job, or a family activity, cancel as many subscriptions as you can. I kept Pocket, which helps me write my weekly newsletter, and Netflix, which I watch nightly with my parents, as well as Amazon, which I should probably cancel to limit temptation.

Take Aways:

  1. If its plastic and it has access to your money or credit, stop carrying it. Give yourself $40-60 in cash for pocket money each month. When this is gone, stop buying non-essentials.
  2. Set up long and short term savings accounts: Save the change, cash it in at the end of each month at a Coinstar and deposit the money directly into short term savings. Have a goal for this money. Open a long term savings account at a different bank with high interest and low minimum balance. Transfers will take a couple days to process and prevent impulse purchases.
  3. Set up a budget: Go to mint.com and set up an account. Alternately, look into Dave Ramsey’s envelope method. Stick to something like: Savings (maybe separate long and short term), Bills, Necessities, Pocket Money. Stick to the budget. Don’t give yourself any wiggle room. NONE.

Recommended Reading:

Rethinking Necessities on Mnmlist: What is necessary, really?

Consumerism VS Minimalism: An alternative to consumeristic overwhelm.

If You Had to Move, What Would You Take?: While not directly related, certainly worth thinking about.

Advertisements