I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too. –Steve Martin
Growing up, the subject of money was a bit taboo in my house. It was considered bad manners and very poor form. My Mom was very good with money, and we never suspected that things might be tight. I never recall having a worry over our family’s finances. From talking to my Mom in later years, I now know that there were hard times, just as any family might have. However, during those times, her choice was to keep mum (ha!). Perhaps if we had been flush with cash, the subject would not have been so tenuous. Either way, I came into marriage very young (21!) with little or no experience with money, and no plan on how I was going to use it, except that I really wanted to use it!
In my early twenties, money burned a hole in my pocket. My husband and I had moved across country for his career the day after we got married, and my young-un self was on an “I’m independent-I don’t know what it costs to live-I’ll have as many cookies as I want, thank you”, rampage. I just couldn’t spend cash fast enough. I was also lonely. Emotions were running high as I moved to a place I’d never been before, with no friends or family around. A perfect storm!!! After bouncing a few checks and humiliating myself, I became very interested in the subject of Personal Finance. I read many books, and then was ready to join my husband on the fiscal bandwagon.
We saved. We maxed out our 401K. We worked hard at our jobs. One of the best things that ever happened to us was that we didn’t have traditional pension plans with our jobs. Our retirement was not someone else’s responsibility. We were on our own. This got us into the habit of saving. (I recently read that, as of 2019, 57% of US Citizens had less than $1000 in their savings accounts!) We also planned – we used every trick: tickle files, envelopes, personal finance software (Quicken is great!), and eventually got ourselves a Financial Advisor. But the first thing we did was create a budget.
A word about Budgets. Have one. It’s never too late. There’s so much budgeting software out there. Check out Quicken and Mint. Both of these have been helpful tools for me. You can choose to do this in an “analog” way as well. A pencil and paper will do the trick. A budget is a guideline, and needs to be based in REALITY! One great way to structure a budget is to track your spending for at least a month (try to make it a month that there is no vacation, or holiday spending – a “normal” month – whatever that means for you). Keep track of everything (this is when software, like Quicken, works really well). Then, analysis is important. Have your categories set up, easy to acquire from any budget website, and you can do custom categories as well. For instance, I have a “books” category. This is not for everyone, but for me, it’s essential. (If I didn’t acknowledge all the books I buy, my budget might look good in theory, but it would be far from truthful). Budgets are extremely PERSONAL. If you have four kids, you’re going to have a larger monthly grocery budget than a couple without children, or as a single person. If you have pets, you’ll need a category for them. The list will continue to grow and change with life’s stages.
Track your spending – really make it a priority. Start going online to your financial institution at least once a week. When I first began paying attention, I went online to my bank every day. I was afraid I would miss something. And in the beginning, I did miss things. I was building a new mindset. As time went on, I could relax a bit. I still check my account against my Quicken register at least once a week. And, guess what? Not as often, but sometimes, I still forget things. It gives me security to know what I have – no matter how much, or how little.
Now that I’m retired (woo-hoo!), we’re in a new zone. I’m trying to figure out what our new “normal” looks like. I’m having fun! And, you can bet, I’m keeping track. As I always say, “I’m not rich, I’m just really, really careful!” I’ll keep you posted on our progress. In the meantime, I’d love to know your “tricks of the trade” in personal finance.
Until next time, when I expound on one of my favorite things: “Honey, let’s dance!!!”