Tuesday, January 15, 2008

Tackling New Year's Resolution #1: Don't be a bastard about money

I'm getting my personal finances in order this year, and it feels so good. The feeling of living well, saving money and making wise purchases is so much better than the momentary high of retail therapy. At least that's what I tell myself.

Here's what I've done so far:
  • Put $1,500 in an IRA with USAA
  • Opened a checking account with USAA and put $600 in it solely for discretionary spending. Having my discretionary spending in a USAA account is ideal because USAA debit cards can be used at any ATM - USAA refunds all ATM fees (up to ten withdrawals a month, or $15 in fees).
  • Tucked away my Macy's and Nordstrom gift cards, rather than spending them right away
  • Not used my credit card at all (i.e. no online purchases, and I'm paying for gas and groceries using my debit card)
  • Brought my lunch to work at least 4 of every 5 workdays, and eaten dinner at home
  • Steered clear of coffee shops when I'm alone (i.e. not meeting a friend for coffee)
Next steps:
  • Put at least $500 more in the IRA
  • Track my discretionary spending, and budget accordingly. If I can stick to $100 a month that's great, if not that's ok, but I still want to give myself a limit each month simply for the sake of discipline
  • Keep track of my Washington Mutual checking account (from which I pay bills) and transfer money to my savings account when I can. I do this anyway, but it will be more significant now since my credit card bill is smaller or nonexistent.
  • Figure out how much I should aim to save each month. It's sad I haven't yet figured this out yet, but relatively recently I got a new job and a much more expensive apartment, so cut me some slack. By the way, my mother and other people say saving 10% each month is good, but I think that's way too low considering I don't have children or high transportation expenses, and my clothing budget is slashed.
  • Do my taxes and deposit the refund into my savings account or IRA. (Note to self: need to find W-2 from previous job! Eek!)
  • Consider moonlighting/other sources of income. My full-time job only requires 35 hours a week, so I might as well devote some of my free time to The Man, right?
And that's it! Probably the hardest part was assembling all my financial documents into one expandable folder. I'm terrible about keeping track of papers, especially those that come through the mail. I opened a USAA checking account awhile back, and lost the debit card before activating it. So I had to order a new one. I make stupid mistakes like this a lot - but luckily my mistakes don't include stuff like marrying a deadbeat or buying a BMW on impulse. Hee!

2 comments:

lindsey said...

google the "60% solution." it puts ten percent of your salary in retirement, ten percent in long term savings (say, for your next car or a house downpayment), ten percent in short term savings (emergency repairs for item X, doc bills, etc), and ten percent for discretionary spending. the leftover sixty is what you're allowed for living expenses. i find it a useful rule of thumb, although i try to save more than that 'cuz i'm anal about the future. i also like the "women in red" message board over on the msn money website.

pve design said...

4 ever chic is to b 4 ever smart about your money. good post and good luck with saving. also - roll those coins every week and deposit in a passbook savings at a small bank - you would be surprised that at the end of the year how pennies make many many dollars. been doing this for years and cannot believe it.
why does one think that they never have enough, start counting your pennies!