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Yesterday was payday and I met both financial goals I'd set at the beginning of the month. The student loan people got their $400 (my minimum is $125, but I've finally decided maybe I shouldn't have this debt forever, you know?) and instead of socking away $200 in savings, I sent $500. Go me!
Part of me got a little panicky when I sent the extra money along, knowing I don't get paid again until the end of the month. But then the rest of me told that part to shut up. Dude. I've got it covered.
People, this is so different than my life two years ago. When Brad and I got back together, I was a financial mess. I had zero savings. I had not started a 401K. I had credit card debts and car payments. And my pay-no-attention style of money management forced me into situations like realizing I only had $100 to get me through a week and a half. Situations that occurred on my "first" date of Brad and Heather 2.0. After I learned Brad 2.0 is in the finance business. Awkward. Worse. Humiliating.
That's when I decided to learn how to budget. After much trial and error, and after I admitted to myself that a ridiculous 20% allotment purely for entertainment was important to me, I developed a system. I started watching my money. I check my accounts daily and several times a week I scrutinize my budget to make sure I'm on track. I freely admit I've gotten quite obsessive about it. Not as obsessive as some of my favorite PF blogs I've listed over on the right, but obsessive nonetheless.
Two years later, this is how I handle my money: (Note, this is not a perfect system and is constantly being revised.)
- Now, I'll say I can't afford something when I technically have the cash, because that money has a better place to go. Sometimes I'll splurge, but sometimes it just not worth it to me and I'll say no. Please don't take it personally. This girl has goals to meet!
- I no longer have credit card balances-- each card is paid off by the end of the month, if not immediately after a purchase is listed. Interest? What's that?
- I contribute regularly to my 401K.
- My car is paid off and I don't plan on having another car payment until it dies a sad little death. Once my emergency fund is fully funded (next month?) I will start setting aside money for this eventuality.
- I keep a $200 cushion in my checking account at all times. Whenever I check my balance, I instantly subtract 200 because it doesn't exist.
- The same bank that has my checking account has savings account #1. This is my true "emergency account" and I keep the balance at $1000. Should my checking ever dip below $200, this is where I go. This is also where I go if I suddenly want to go to the Bahamas and my travel fund doesn't quite have enough saved up. The second this account is used, replenishing it is my priority.
- My savings account #2 is held with ING, which has a higher interest rate and is harder to get to. I really, really need to need that money in order to spend it. So far, I haven't needed to. (Commence wood knocking.) I'm trying to get this to $5000, and then I will send less its way each month, and bulk up the savings for other goals.
- After far too many years pretending my student loans don't exist, I find great delight in watching the balance drop. Getting the balance down to $10,000 is one of my goals for this year.
As I said, the system isn't perfect and sometimes I think about adding a second job just to watch the debt fall faster and the savings pile up. But right now, spending time with Brad, or with my friends and family, or even alone is very important to me, and I'm not yet willing to give that up.
My networth isn't spectacular. It's really not even mildly impressive. But it's so much better than what it was that my mind still boggles on how far I've come.