Caring About Money – Part 3

August 13, 2008 at 7:52 pm 1 comment

Here are the four things I did, based on my reading and conversations with people, to work towards my goal of owning an apartment.

1. I started a savings account. I used ING Direct (and have referral links if you want to start an account and get the bonus.) Other places have higher interest rates now, but there’s has been pretty consistent, they are reliable, and most importantly it was really easy to do. I just sat at my computer and within a few minutes I had set up a savings account that automatically deducted from my bank account. For the first two months I only took out $25 a month-I wasn’t sure how it would go. When I saw how easy it was on my spending, I upped the amount a lot, so that I was depositing ten, then twenty percent of my paychecks each month. I have it deduct right when I get my paycheck (twice a month) and my paycheck is also direct deposited, so I never have to worry about it. Since money is going to be a lot tighter for me as of September when I start paying twice as much rent, I am going to have to cut back on this for now.

Having the savings account at all made a huge difference in how I thought about money. Just knowing the extra was headed somewhere made it so much easer for me to not make small random purchases. Some people make different accounts for different goals, which supposedly makes this even easier. I haven’t done this yet, because I like seeing the big number in there. Big to me, anyways.

2. I got a real credit card. When I turned 18 and went away to college my mom took me to Citibank, where she had an account, and we started an account for me with a credit debit card. It was accepted everywhere like a Mastercard but it worked like a debit card. Since I wanted to build a good credit rating, I decided to get a credit card to pay off every month. I went with an American Express, as I have heard good things about their customer service and know they are ranked highly b credit reporting agencies.

I have been using it and paying it off as soon as the statement arrives (via email, notch) and as a bonus, it’s a cash rewards card, so I am actually saving a few dollars here and there by having a credit card. Since a lot of the blogs out there are about getting out of debt, they will tell you not to have a credit card. Obviously, that is not the route for me. And since I am paying it off each month I was able top choose a card with higher rewards and not worry about the interest rate-if it ever gets to the point where I am paying even a penny of interest then I have messed up my plans.

3. I started tracking my expenses. I’ve mentioned this before. Basically, I made an excel spreadsheet and put everything in it.

4. I created a rough budget and started trying to stick to it by cutting back places. Because I started tracking and cutting back at the same time, I have no good comparison to how I was doing before aside from the amount I have in savings. I kind of regret that.

Ali asked before about 3 things you really should do. I would say start a savings account, track expenses, and look for areas to cut back, and do it in that order. I wish I had a good record of my expenses before I cut back, so I could feel proud-stupid motivational tricks totally work. Oh, and the number one thing you should do-if you have a job that offers employer match on 401ks, contribute at least enough to get that match. I don’t care how young or poor you are-if you aren’t doing that you are basically turning down higher pay.

If anyone else has suggestions of the 3 things you really should do, I’d love to hear them. Also, let me know if you actually do them or not 😉

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Entry filed under: budget.

Caring About Money – Part 2 Free is Better Than Cheap

1 Comment Add your own

  • 1. Aaron Wakling  |  August 13, 2008 at 8:16 pm

    Hi there,

    I looked over your blog and it looks really good. Do you ever do link exchanges on your blog roll? If you do, I’d like to exchange links with you.

    Let me know if you’re interested.

    Thanks..

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