This is the final part of a three-part series, Navigating the Financiapocoalypse. It’s intended as a get-started guide for people just starting down the path of actively managing their money.

Saving money in and of itself is representative of a longer view of life than someone who blows their whole paycheck every month. But saving for your retirement and other really, really long term goals is different from saving for your next car or vacation. Before we go any further in: I am not a certified financial planner, and I haven’t been doing this all that long — I can only tell you what I have found, and crunch some numbers as examples.

The sooner you start saving for your retirement, the better. Well, that’s obvious, you might say, but just how much better are we talking about? Let’s look at a couple scenarios.
Read the rest of this entry »

This is Part 2 of a three-part series, Navigating the Financiapocoalypse. It’s intended as a get-started guide for people just starting down the path of actively managing their money.

Even more important than how you’re spending your money this week or this month is what you’re doing with what’s left over. Americans are saving less than ever before, at a time when health care costs are rising and retirement plans (and the chances that Social Security will exist in 35 years) are dwindling. You do not want to get caught with your pants down later in life — start saving now. Save early, save often. In an economy like this, though, forcing yourself to save can be tough.

Set a goal

As I said in part 1, I don’t track every dollar of my monthly expenses. I do, however, kind of have a reverse budget — I don’t map out my monthly expenses, but I do keep an eye on my savings percentage. I set a goal — say, I want to save at least 30% of my take-home pay every month — and if I’m not meeting that goal, or not able to meet it comfortably, then I know I need to go back and re-examine my “right now” expenditures. Once you have a number to shoot for, you have to set some things in motion to achieve it.
Read the rest of this entry »

This is Part 1 of a three-part series, Navigating the Financiapocoalypse. It’s intended as a get-started guide for people just starting down the path of actively managing their money.

Before you can do any saving, you need to get your spending under control. As I said in my intro to this series, however, this isn’t going to be a guide on how to be a total cheapskate. I’m not going to be the one advocating use of a coffee shop for Internet access and the sports bar to watch TV, or putting on six sweatshirts so you don’t have to turn the heat above 50. But there’s plenty of smart decisions you can make to reduce expenses while still maintaining a lifestyle you enjoy.

My thoughts on budgets

Lots of financial types insist that you have to have a strict budget. Maybe this is starting off on the wrong foot in a lecture about controlling spending, but I have a confession to make: I don’t keep a budget. (I have a guideline that I call a “reverse budget,” but we’ll talk about that in part 2). I do keep rough numbers in my head, but I’m not going to agonize over every dollar — it’s too time-consuming and too much micromanaging. I know what our typical monthly expenses are, and I try to keep them low. Beyond that, my energy is better spent on doing more active things to control our money. Besides, many of the people I’ve met who do dollar-by-dollar budgets are usually so obsessed with recording that last receipt in Quicken that they forget to enjoy life.
Read the rest of this entry »

Given the number of conversations my friends and I have about finances and money management these days, I think a post of this nature is long overdue. Given my age bracket (mid 20s), part of this is just my demographic being new to managing money — once they get out of college and actually have some money, people tend to develop a new interest in managing it properly — but a big part of it, of course, is our current economic situation. More than ever, you want to make sure a buck goes as far as it can — I think it’s safe to say that’s a concern no matter tax bracket you fall into.

I’ve absorbed a lot of information from people who have been doing this a lot longer than I have, but of course I do have some of my own experiences to share. I’m not an expert, obviously, but if I can help anyone even a little then I’ll be happy. People not handling their money properly — either because of apathy, ignorance, or by the hand of misleading and disingenuous bankers — is largely what led to what many bloggers are calling the “financiapocalypse.” (That’s going to be the last time I use that word, it’s too hard to type!)
Read the rest of this entry »