Growing up I was always kinda taught that talking about money was a bit tacky. It was one of those topics you avoided on a first date or at a dinner party – right up there next to politics and religion. However, I’ve slowly been discovering this beautiful thing called the personal finance blogging community. There are incredible stories of everyday people paying down their debt, building emergency funds and saving for a better way of life for themselves and their family. What surprised me most as I first started to visit these sites was how open each person was sharing their journey with the goal of helping others who were in the same situation.
It makes sense. Talking about money shouldn’t be tacky. Bills, budgets, saving for retirement, paying for college – these are things that a lot of us deal with on a daily basis…why shouldn’t we have conversations about them? I think it’s great there is an entire community dedicated to sharing their knowledge on what works, what doesn’t and how to be financially smarter so that bills and budgets don’t swallow us whole.
A good friend of mine is kicking butt over in the personal finance blogging space and was one of the driving factors that inspired me to start a blog of my own and begin tracking my goals, whether financially speaking or in other areas of my life. She and others are paving the way for millennials. The more financially savvy we become, the less time we spend stressing out about making ends meet and the more we can focus on the important things, i.e. family, friends, career development and hobbies we actually enjoy.
That sounds pretty awesome, but easier said than done, right? It usually is.
So while talking about personal budgets still may not be the hottest topic at a dinner party, today I want to start simple and talk about my basic monthly budget.
Background on my own financial history
I wasn’t always the greatest at saving money even from the time I was very young. My allowance always seemed to disappear quite a bit quicker than either of my siblings. As soon as I had six dollars saved up (that was a lot for a ten-year old), I was off to find the nearest Hallmark to pick up another beanie baby to add to my collection. I’m ashamed to say I probably could have paid for my college tuition with the money I spent on beanie babies. That might be a slight exaggeration, but you get the idea.
Like most of the people I know, I grew up in a middle class family. I never felt like we were hurting for money. We always had everything we needed (and more! I just didn’t realize it when I was younger). If someone were to ask me today, I would say my dad is frugal, but ten years ago I probably would have used the term stingy.
We never had the newest clothes or electronics. We rarely went out to eat and NEVER ate fast food. My friends thought we were weird, and I remember hating going grocery shopping with my dad as a kid. Any junk food I tried to sneak in the cart was immediately put back on the shelf. We were the family that bought pop-tarts WITHOUT icing. Most people don’t even know those exist.
But there was always enough for the things that mattered.
We ate delicious home cooked food, my two siblings and I were always able to play on the sports teams we liked, and my dad was able to substantially help each of us with going to the college of our choice.
Now that I’m older I’ve realized all of decisions and sacrifices he made while I was growing up were the ones that gave me all opportunities I’ve had to be successful.
All of these little things added up to make a big difference.
A little closer to the present
I don’t have any credit card debt and I never have. I’m terrified of it. I probably get that from my dad. Actually, up until this point I’ve only had one credit card that I use two or three times a year just to avoid penalties for not using it. I get stressed and start to sweat a little just reading about other people buried in credit card debt. I recently applied for a travel rewards card to hopefully build up some points to use towards a bachelorette trip next year. I plan to will pay off my balance at the end of each month and refuse to pay a dime in interest. I realize using credit cards can have a lot of benefits if managed correctly so I guess its time to give them a try.
I don’t have any student loan debt. I realize how lucky I am to be able to say this. In the spirit of full disclosure, I worked hard to get a lot of my tuition paid for through scholarships but I also had help from my dad paying off what was leftover in loans. If I could go back I probably wouldn’t have chosen the expensive private university. You can get an equally good education somewhere else for a lot less, but I’ve come to terms with the fact that 18-year-old me was not the best decision maker. If you’re not sure what you want to do career wise, don’t be afraid to take a year or two before college to explore your options. Don’t feel like you have to go to college because that’s what all your friends are doing or because it seems like the next logical step. Sometimes I wish I would have considered this as an option.
My only debt right now is from the new car that I bought last summer. I held out as long as I could, but the 1999 Nissan Altima just wasn’t cutting it anymore. When you’re pouring money into something that’s slowly dying its time to cut your losses and move on. I put about a third of the cost down when I bought the car, and because I have a good credit score my interest rate on the remaining loan is fairly low. As it stands today, I have $11,826 left to pay off.
Expenses & Target Budget For Nov ’14:
Rent – $900/month
I’ve done my research and know that we could pay less monthly on a mortgage if we were to buy a house in this area. However, we’re just not ready to plant ourselves here. We’re working to save up a hefty down payment so when we’re ready that won’t be an issue.
Car – $300/month
I pay a little bit more than the required balance each month. Every penny counts!
Groceries for two humans & 1 kitty – $400/month
This is my target each month. Sometimes we’re over, sometimes under. I need to do a better job of tracking this and figure out more creative ways to stay within our goal.
Gas – $120/month
I have a car that gets pretty good gas mileage but sometimes weekend trips to see friends and family means filling up the gas tank more often.
Car Insurance – $0
I choose to make my payment every six months.
Cell Phone – $40
Thank god for nice parents who let you stay on their family plan even though you are a grown adult.
Television – $7.99/month
We refuse to pay for cable. I cannot believe how much it costs and prices are always going up. More and more people I know are choosing to go without it. If you are looking for ways to cut back on expenses, this seems like an obvious choice. We received Apple TV last year for Christmas and only pay the monthly fee for Netflix.
Home Improvements – $200/month
Entertainment – $200/month
This is how much I am giving myself for fun in November. This category includes eating out, booze, new clothes and anything else outside of the above expenses.
Total Spending Budget: $2,167.99
I should mention that Derek and I split the bills so that’s why you don’t see things here like gas, water and Internet. I’ll let him talk about that some other time.
1. Find an electronic tool that will help track my budget
Visiting 8,000 different websites to get a holistic view of your finances is not the most efficient thing in the world. Do you have any suggestions? I’d love to hear! Please leave a comment below!
2. Talk about savings accounts and retirement funds
I already shared a lot in this post so I’ll save what I’m doing to prepare for our future and retirement for another day.
3. Find ways to diversify our income stream
One thing I’ve learned from reading personal finance blogs is that one of the keys to building wealth is diversifying your income stream, and not being 100% dependent on a single source. Freelance writing is something I have a growing interest in so we’ll see where that goes, but I’d also like to explore other options as well. Now, I just need to remember to stop reading about what other people are doing and get out there for myself. I can’t help it, I just get sucked in sometimes. 🙂 What do you do to make extra income?
4. Track the variance between my budget and actual spending each month
I have been doing horrible at this, but when I stick to it I turn into a huge nerd and get really excited about trying to stay under budget. It’s like a game! A really nerdy game!
Next time I’ll share some of my favorite personal finance blogs that have really motivated me to get my financial sh*t together. Hopefully they’ll do the same for you!
If you write a personal finance blog or have a favorite of your own please leave it in the comments, I’d love to check it out!
Cheers to a financially savvy November! love, adrienne