How to Budget: Personal Finance Basics


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How To Budget And Personal Finance Basics

I used to sit with my dad as he combed through the finances, his brows furrowed in concentration. Little did I know that on those mornings I was subconsciously learning how to budget and personal finance basics. They say we learn everything from our parents.

He’d sit on a stool at our open kitchen and just devour the information over a cup of joe. I was curious. Why did he devote all this time to his spreadsheet? Was this a work project?

He went over how he calculated all the household expenses and income and balance it all. He kept tabs on check balances and even his car depreciation.

It kind of went over my head. I was busy just trying to figure out what I wanted for breakfast or how to laze around for the day. I honestly spent a majority of my 20s not knowing much about my finances or how much I made. I always worked during college and had a plethora of jobs after. I could afford the things and experiences I wanted, but I didn’t really know how much was being spent; how much was wasted or saved. To this day I wonder how much I could have been saving during this time.

The first time I had to budget I just made a list of the income and combed through every single expenditure that I made. Then at the end, I subtracted the expenses from the income. Every coffee I bought, every lunch I ate out, and every trip to Target I took was recorded. It hurt. I literally cringed when I realized how much was being wasted.

I mean, did I really spend $50 on coffee this month??

And what was that subscription on my card? They’ve been charging me for over a year!

I realized I could be saving thousands a year and making more out of my money if I accounted for it all and held myself responsible on how it was spent. However, I realized this wayyy too late in the game; the money was already spent. I felt really bad after realizing how much was wasted. Part of me didn’t want to keep going and budgeting, that’s how bad I felt.

Now It’s been 4 years of budgeting. 3 years. I keep it all on a spreadsheet. Google Spreadsheets :). I can track how much my income has increased in those 3 years. I can track how much my overall spending has been by category. I can brainstorm on ways to cut costs or increase income. I can make long term goals like paying off all my debt and estimate the last payment date.

Omg I love spreadsheets!

And I don’t spend hours upon hours on it. I pretty much spend a half hour tracking my spending twice a month. Once in the middle and again at the end. Literally ONE HOUR a month. I recommend setting mid month goals and then reassessing for the latter part of the month if your unclear or are unable to meet your goals.

Below is a simple sample of what you can do.

Income

Take home Salary $2500

Expenses

Rent $-700

Food $-250

Transportation $-200

Internet $-50

Electricity $-50

Phone $-70

Misc (shopping/medical related costs/eating out) $-600

Credit card payments $-100

Student loans $-150

Total expenditures= $-2170

Savings $330

Tip: Put your savings towards credit card debts and student loans to make the payoff date faster. Or save part of it for an unexpected expense.

I wouldn’t say budgeting will fix any money problems overnight but it will definitely give you a sense of control over your finances, plan for a rainy day and create a long term plan with goals. But personal finance and gaining control of your spending/earning is the first step.

Websites like Mint and Money Trackin can help you keep it all if you’re not crazy about the spreadsheet idea.

Update: I have saved sooo much money this way, literally thousands of dollars. It’s a very simple strategy but it 100% works. It’s all about motivation, perseverance and keep up with the tracking.

Feel free to comment below on your goals or feedback on your budget!

Check out my other post:

The Biggest Financial Decision You’ll Ever Make

The Inside Scoop on Swagbucks. Is It Legit?

How To Save Tons Of Money On Groceries 6 Easy Tips!

Why Corporate America Is A Necessary Evil


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Surviving Corporate America is hard. The corporate environment sucks the life out of you

Corporate America is a necessary EVIL. I’ve never made more money than when I worked in a corporate environment.  So I need this job to make money but why am I at this job?  Can your career give you inspiration to live the best life?

Propaganda: information, especially of a biased or misleading nature, used to promote or publicize a particular political cause or point of view.

I’ve been searching for the past few years for a job that can give me meaning.  A purpose.

I envision being part of a group that is warm, friendly and a team environment.   Surrounded by positive people, positive thinking and inspiration. We’ll go out for drinks once in a while.  I’ll also get an hour lunch.  The workload will be totally manageable with time to spare.  I’ll be able to take initiatives over everyone else and be recognized as a performer.  I’ll be well-liked and have good benefits/salary.

I would say 97% of the population does not have a job like the above.

Most corporate environments do not offer that kind of environment.

Why?

Bottom line.

Corporations generally are in the business of making money. Making money means squeezing all your resources for what they are worth, including human resources.  As soon as money is involved, individuals tend to get crafty, shysty and overall unfair to others in order to get a leg up.  And then big bosses and companies will turn a blind eye, because it’s not effecting bottom line or rocking the boat will effect a bottom line. Financial decisions don’t take into account emotions, personal development, or personal growth.  It’s only about company and business gains.

Still, many companies in corporate America have mantras, company values, and goals.  Many of them include excellence, honesty, integrity, teamwork.  Of course you can try to buy into this.  I did. And every time I was disappointment when I was overlooked for a promotion or someone who totally lacked these values received a better review.  The reality is that these values are a stick and carrot method of propaganda, meant to keep employees motivated and drive revenue.

In reality, company culture/values is nothing more than clever branding.  A way to keep people motivated as well as sugar coat any negative culture the company has.

So how do you stay motivated? Especially once you realize that the company values is a load of BULL*****.  How do you keep the inspirational thoughts and inspirational quotes alive in your head?

Well, take a moment to think about your own values and financial goals.   “If I work here X amount of years, what can I accomplish?” “What’s my next step, If I find this company isn’t working for me anymore? Can I go and do my own thing?”  “Does the work itself give me happiness?”  “Will this help me get to retirement/financial stability?”

Having a reason in your mind will help you get through the hardest of days and the darkest of nights.  Patience and time will always be on your side, so keep at it.  But don’t believe the propaganda in corporate America because truth always has a way of coming to light. And motivation built on false propaganda is like a house made of sticks.

Check Out My Other Posts

Dealing with Toxic Work Culture

Work Smarter, Not Harder

How To Get Ahead At Work Without Brown Nosing

The Biggest Financial Decision You’ll Ever Make

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Find Out What The Biggest Financial Decision You’ll Ever Make Is And Why Getting A High Paying Job Won’t Cut It

From about age 16 we hear this question over and over. “What do you want to do with your life?” “What degree are you getting?” It’s difficult, what you choose at 18 or 20 decides a lot about your lifestyle. It’s a huge financial decision to make. Maybe you’ll aim to be a traveling DJ with partying lifestyle. It’s flashy and fun but involves all your weekends and most evenings. You’re your own boss but have to hustle hard in the beginning to bring in clients. Or maybe you decide you want to be an attorney, you’ll need 3 years of law school and a lot of debt. You graduate in the middle of your class and struggle to get a job that will cover your living expenses and your debt. Or maybe you decide to go into banking, it’s a high paying job and great money at first but now is going automated or overseas.

You get the picture, your career needs to last 30-40 years! That’s a huge commitment! You need to think longevity. Can your industry last 40+ years? Is your career mostly age/appearance related? What is the growth opportunity?  How will you grow and find jobs in your industry?  Are you going to enjoy your work enough to do this for decades? These plus many more questions have to be carefully thought out for your future!

The timeline goes something like this:

20s: finish college, flail around trying to figure out what works then find a niche. Start at the bottom.
30s:grind out security in your field/job. Maybe do other adult things like marriage/family.
40s: Some progression/growth opportunity may have occurred at this point, but still trucking along.
50s: start really preparing for retirement and sending kids off to college.

The point is that for most of us, delaying choosing a career or even frequently changing careers past your 20s is detrimental for financial/personal stability.

You can’t spend your 20s and 30s working in odd n end jobs and expect the same return as someone who settled in a career at 25.

This post is not to offend those living alternative lifestyles that appreciate freedom over security. I just want to encourage and inspire everyone to be very conscious in their choices and think about your career as a major financial decision. It’s easy to start off in a job with you thought will be temporary but end up with 6 years in the hole with little advancement. It’s easy to keep changing directions, searching for a high paying job, and then end up really nowhere but at scratch again.  There’s a lot of inspiration in life, you just need to find your niche.

What you choose as your career matters. You can switch your major a few times or change a few jobs but eventually….you choose a career or your career chooses you.  If you want to find a job, your dream job, then you have to start now.

I went to my 10 year high school reunion and it just a bunch of adults standing around saying where did the time go? As a follow up, I’m going to go over goal setting and achieving in another post. Hopefully more of us will be able to tackle our goals and be able to be proud of how our time was spent.  This post is about nothing else but love, good thoughts, positive thinking and motivation to inspire..

Check Out My Other Posts

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Review: “The Total Money Makeover” by Dave Ramsey

Things I Wish I Knew When I Was 18

Carefree

 
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There are so many things I wish I knew when I was 18

Things I wish I knew when I was 18 just starting my adult life.

This time of year I get really nostalgic, is it really 2018?  10 years after the recession and 11 after my high school graduation?  God, if only I knew then what I know now…I would shake some sense into me! These are the things I wish I knew when I was 18.

Go to a cheap college

Either state or city school.  Don’t spend thousands and thousands of dollars on the private college experience unless you’re are getting a significant scholarship.  The experience just so you can party is a waste of time.  You’ll have to grow out of that behavior when your older and ready to settle down.  I bought into the whole college experience and literally felt bad for every one else who had to commute to their college and were unable to be “independent” and have fun.  

Now I envy their freedom from debt.  I did not think about student loans, what the interest rate would be or how it would effect me financially.  I didn’t even understand how much I was really taking. 

Don’t compare yourself so much to other people.  Stay in your lane.

I started college right before the start of the recession.  It was all about who was friends with who, what you wore, what parties you were invited to, and who you dated.   I really prioritized these things.  Facebook was just starting to take off.  (This was before it became a corporate spy for ad companies). I would literally get depressed if I saw friends having fun without me. (How dare they leave me out!)   I’d be in a state of depression and have anxiety too.

Now I’m so happy when I’m on Instagram or Snapchat.  Because everyone’s life should be awesome and it’s great seeing other people succeed and grow.  At the same time, I’ve learned how to humble and grateful.  I’m realizing how blessed I am.   This is the kind of positive thinking that fills you up and makes you a memorable person to be around.

Do you, worry about what’s in your pocket!  

One of the things I wish I knew when I was 18 was not to care so much. I used to care so much about everyone having the same opportunity, not selling out, and being fair.  What I didn’t realize was that by giving everyone a share of my pie, I really didn’t have anything for myself left.  I mean, didn’t I earn the whole pie? 

I shared way too much; my ideas, my time, my money.  And it was all because I wanted people to like me and not view me as selfish.  And 99% of them, are not even in my life anymore.  I really didn’t have to put all that effort, because the people who  are still by my side never really needed anything from me.

 It’s about how much you save

YOLO and FOMO were pretty much one of the worst, most unnecessary  campaigns of my youth.   

Like we totally fell for it. We bought things and went on trips with money we didn’t have all for the show of it. 

If I had cut back savings just for dumb things like coffee, alcohol, fast food, and general wasteful spending and then invested that in a mutual fund….I’d have a nice nest egg for a down payment on a home.  But unfortunately 18-25 yr olds don’t think like that.  YOLO! Oh wait, I’m here another day, just broke.   Saving would have been the best financial advice to follow at that point.

Love is not a Disney story line.

I was really impractical and selfish during my early 20s.  I’m lucky was able to hold on to the man of my dreams but it definitely did not pan out like a Disney storyline.  At 21, I felt entitled like a princess.  My husband felt like he had to take me out on dates with money he didn’t have!  I sometimes felt like he wasn’t good enough. 🙁  Little did I know he was Mr. Right, my Mr. Big.  We could’ve just saved a lot of fights and bad behavior if I wasn’t sooo cringey. 

Over time, I learned that I needed to bring something to the table besides being pretty and young. Relationships are really a give and take and not so much about you changing the other person but about being complementary. 

At 28, I’d say I feel more matured but if only 18 year old me knew these things.  Life would have been so much easier!

 

Any thoughts? Or anything to add?  Feel free in the comments below and let me know what you think about “Things I Wish I Knew When I Was 18.”  Getting older is great as long as your also getting wiser!

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Check out my other posts 

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Review: “The Total Money Makeover” by Dave Ramsey

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I have a confession to make.  I am in debt.  I am in debt up to my eyeballs.  At this point I have almost 50K in student loans.  Me and my husband are also wasteful spenders.  We kind of already know this but also ignore it.  You name it, we spend on drinking, restaurants, unnecessary bullsh*t that we don’t need.  We have no real money because of our debt. So I picked up “The Total Money Makeover” By Dave Ramsey. I decided to make a review and summary on the financial advice that he gave.

So I picked up “The Total Money Makeover” because I love the topic of money and managing my money and wanted to see if maybe there was a better way to go about it. We’ll let me just tell you, at first I was skeptical some of the changes he suggested, like selling your car or getting rid of your car lease in exchange for a used fully paid car.  It seemed severe.  But I did the math and Dave’s formula for money success made sense! This review is going to cover exactly how Dave Ramsey did that.  And maybe it isn’t the fastest way, its likely the easiest and clearest way for the Average American.  Total Money Makeover is such a great book to read for financial literacy.

Key Highlights In This Review:

Debt Free- means no payments either for student loans/ car payments/ credit card etc.  Most people have this but Dave says “Imagine you didn’t have to pay those payments, how that would free up your income.”  In my opinion, he has a pretty decent though challenging system for clearing these debts.

Budget- goes into some detail about eliminating wasteful spending and avoiding “Keeping Up With The Joneses” mentality.  Me and Hubby don’t really need to be going to the fancy restaurant every week and taking Snapchat pics titled “Love BAE!”  Yes, I indulge in that behavior.  I am one of those people.  Wasteful spending is probably the first place you can tackle any money issues.

Emergency Fund- Most people rely on credit cards if a large emergency were to pop up.  If a spouse loses a job or a major medical bill/car bill hits you unexpectedly.  My dad had always told me that you should have at least 6 months savings for this reason, so I knew this was good advice when I read it.

Saving for Retirement/Debt Free/Home Buying and Beyond-Dave’s math makes sense.  Once you no longer have to pay off debt, that frees up your income A LOT.  I actually haven’t gotten to this point yet but it all seems very solid.  It would be really nice to have the freedom to plan your retirement and maybe even save to pay your house upfront!  

Overall, “The Total Money Makeover” is recommended for others to get a grasp on their finances.  At the very least it should assist you with a plan to get out of debt. 

 “The Total Money Makeover did have some limitations.  

It’s really not going to be of any use unless you are willing to downsize/ change your lifestyle/ commit several years of your life to debt reduction/ if your spouse had a spending or gambling problem. 

I also thought that the ending was really rushed in terms of getting to major wealth.   Getting to the point of living off investments and no debts would require tremendous sacrifice for 15-20 years.  The last chapters doesn’t explain distribution of wealth well enough to feel obtainable. 

One last gripe in this review are that the stories that were used to support his theories and ideas.  He used about 30 stories.  I hope this isn’t petty, but there wasn’t enough minority representation.  It was mainly middle class White Americans with average or above average income who had  fallen into bad debt from their own misspending.   I’m Latina/Asian mix and the only representation of my race was a single Latina mom who had 2 kids:  Really?!  Come on, Latinos could have been better represented.  Also the stories with the single income family with homemakers also made me cringe, that’s also unrepresentative of a majority of families now. 

But overall it’s a great step towards financial planning as well as financial responsibility.  It’s a great book to read for those just starting to get a grasp on their spending.

So there you have it, after reading this book, I was able to talk to my husband put a budget together and make a solid plan for knocking out that 50K student loan in 1 year as opposed to 5.  This was better than student loan refinancing that would still take 3 year at at least 3%.  I also realized that the mutual fund I had was useless if I was spending 6% interest a year on a 50K loan.  Cashing out and being broke is better than  stringing myself along with debt. Will keep you guys updated on my progress.  

If any of you have read this book, feel free to share your thoughts in the comments below. Let me know what you think about my review!  

tmmo_new

 

 

Check out my other book reviews!

Motivational Book Club: The Defining Decade: Why Your 20s Matter, by Meg Jay
Motivational Book Club: The Subtle Art Of Not Giving A F*ck By Mark Manson
Motivational Book Club: 7 Habits of Highly Effective People by Stephen Covey
My Favorite Dating Book: Why Men Love Bitches