Learning to manage money

Discussion in 'Teacher Time Out' started by hbcaligirl1985, Jun 29, 2012.

  1. hbcaligirl1985

    hbcaligirl1985 Cohort

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    Jun 29, 2012

    So, I feel dumb asking this at 27 years old, but like I've said before, I've had a privileged upbringing--in fact--subbing is really one of the first real concrete jobs that I've had. I briefly briefly worked at Disneyland (DONT DO IT! DON'T EVER DO IT!) In 2004, Fry's in 2008 and at an Online Magazine before I got my subbing position. However, at the time my grandparents were still giving me extra money for gas or spending money so I never really realized how hard it is to SAVE money.

    I made the very dumb mistake of the first time since having a credit card in 2003 of spending too much--and now I'm having to sell a lot of my stuff to pay off the $600 I owe--I know it could be a lot worse but considering my credit card limit is $1500--I kind of made a very bad decision.

    So my question is this: how do you manage your money? I'm lucky enough to be inheriting a rent free house and a car that's paid off--so I'll really only have to worry about utilities, taxes, gas and groceries. How do you manage your money though so you still have some spending money for yourself? My original idea was to split my paycheck evenly each month. 1/6th on gas, 1/6th on my yearly insurance (house, car etc) but without knowing what I'd be making once I get a full time teaching position or sub more often--it's hard to determine that. Even if I was to have 1/6th of my paycheck be on spending money--I feel AWFUL spending it now. Today I had to buy some MAC foundation (the only kind that works efficiently for me) and I cringed at paying the $32--that's ALMOST half a days work.

    SIGH--it's so much easier when the money is magically coming from someplace else, isn't it?

    So ya--money managing tips, please? I definitely want to be a responsible individual so when I start dating and having a family--I have good examples and morals to pass down to my children.

    Sorry if this was all over the place--it's almost 4:30am and I can't sleep because I'm sick =(
     
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  3. scmom

    scmom Enthusiast

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    Jun 29, 2012

    Well, some of us are cringing wishing we were as fortunate as you, but I admire you wanting to start off well.

    My 20 year old son just showed me a program he has on his I-pad that syncs with his bank account. It tracks all his spending (no cheating - I do mean all) which he puts into categories so he can see how he is doing. For example, currently he is spending WAY too much on food and we discussed how he should try harder to eat healthier and spend less. It gives him alerts on his balances and lets him know if he is spending too much for the month, etc. For example, this month he is in the red (spending more than his income, but he used savings) because he bought himself a car with cash. He also chooses a savings goal and he can see how he is progressing at that and reminds him of bills due. It has some nifty graphs and he really likes the app.

    Anway, at this point he is more fiscally organized than I am and if he continues it will give him a really good start to his adult life. He also got a credit card this week which scares me but has a low limit and he has great plans on how to manage it. His credit score was over 800 - wow! I was impressed with how organized he was and this program really helps but it works with his personality. Maybe something like this would help you too?

    Good luck!
     
  4. agdamity

    agdamity Fanatic

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    Jun 29, 2012

    The first thing you should do is set up a budget. Start with your estimated monthly income (if it varies, use the lowest amount you bring home). Then subtract all monthly expenses (if you don't have exact amounts, estimate by looking at past bills--look for trends, and if all else fails estimate high). Monthly expenses would be insurance, utilities, credit card bill, etc. Then you take what is left and divide it out for gas and food. Be reasonable with your grocery budget. I can grocery shop for my family of 4 for roughly $60 a week (some weeks it is a little over, other weeks it is $30, just depends on what I need that week, how many coupons I have, etc., but I budget $250 a month). Also set some aside for savings and retirement (if it's not already taken out of your check). Whatever is left over is your "fun" money---eating out, shopping, movies, etc.
     
  5. John Lee

    John Lee Groupie

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    Jun 29, 2012

    Only thing I can say is, don't beat yourself up over that credit card lesson/mistake. Credit card companies prey on young people... Back in my day, they used to set up shop right outside the student center, and they used to hook us in (and you got a free t-shirt). $20,000 later, I learned my lesson... pay it off monthly! You got off much cheaper.

    As a sub, it's hard to budget. As you say, little things eat up your daily existence. If your goal is to just spend more wisely, I think you have a good bead on it. If your goal is to save money, that becomes more complicated.
     
  6. Ms. I

    Ms. I Maven

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    Jun 29, 2012

    I was in your same shoes...lived w/ parents throughout my subbing years, only child, so I'll be inheriting everything, had little retail & clerical jobs before subbing came along, which became the best job I had at the time. But, yes, due to the unpredictability of how often you'll work, it's can be hard. I had some bills too (except for the 2 biggies: Car & rent or mortgage), yet subbing's been very good to me & I never had to ask my parents for money. They volunteered to give it to me at times. They never had me contribute to any household bils though because they knew I didn't make enough for that. It also helps that my district is, I believe, the highest paying district for subs AND I was blessed to have mostly long-term assignments throughout my subbing years, I'm talking times when I subbed the entire school year. Summers though were a little tough because the that's the time I'm out & want to have fun & do things, but being a sub, I had the least amount of money during that time because my district wasn't year-round, so I never got called. I got used to it, since I was a sub for a good 10 years (while in grad school). I didn't intend to be a sub for that long. I was a special ed teacher for just a year about halfway during those years. At the beginning of those years, I had another pretty good job as an account services rep at the call center of a major credit card & worked my way to senior acct rep. I didn't want to work that many hrs a week at that job, but it was a little extra money. I actually had that job BEFORE I started subbing, but I didn't want to quit that rep job for a while. I finally no longer had the job when the facility closed, otherwise, I still would have been there for probably at least a few more years.

    Having that tax return that one gets in April/May helped out a lot. Spend as little of that money as possible since that may be one of the last big money before work's done for summer. You may have to get another 2nd job somewhere. Being a sub, you really can't spend too much ever because you don't know when you won't be subbing for a week or so. Always keep as much as you can in your bank account. If it means you not shopping, going to the movies, & other fun stuff to pay down that credit card bill, do it.
     
  7. eddygirl

    eddygirl Companion

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    Jun 29, 2012

    When I got divorced, the household income dropped 50%. Since the kids and I stayed in the home, I still had all the same fixed bills (mortgage, utilities, school tuition, etc.) that we had before. It was tough, but I think what made it possible for me to get through those first few years was to really examine our "wants" vs. "needs."

    The "needs" were obvious: home bills, car repairs, and, in our case, school tuitions. The "wants" were more flexible: clothing, entertainment, things to make the home more comfortable. I kept a budget, but when I had some money above the budget, I stopped to think about if I needed something or simply wanted it.

    Evaluating wants vs. needs really helped me get through those lean years. It also felt really good to put some money in the bank by passing on some items that we really didn't need.

    If you are starting out on your own, give some serious thought to your wants vs. needs. If you can, forego some of those wants for a while so you can save a bit of money. If you build a little cushion of savings for yourself, you will feel much more comfortable spending on something you really want down the road, or if an emergency comes up (like a major car repair), you won't have to panic about how to pay for it.
     
  8. smalltowngal

    smalltowngal Multitudinous

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    Jun 29, 2012

    Great advice! This is what I did as well.
     
  9. hbcaligirl1985

    hbcaligirl1985 Cohort

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    Jun 29, 2012

    Oh awesome!! Whats the program?
     
  10. Ima Teacher

    Ima Teacher Maven

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    Jun 29, 2012

    You've gotten some really good advice so far.

    I also had what I consider a privileged upbringing, but my parents (especially my mom) made sure that I was money-smart. My dad had a stable, high-paying job. My mom was a SAHM. I never had assigned chores or an allowance. Brand new car for my 16th birthday. Went to college on scholarship. Never had a job of any kind until I graduated college and took a subbing job. That doesn't mean I had it easy.

    They stressed living UNDER your means, not TO your means. Saving was important. They taught me to have nice things, but not spend recklessly. I had everything I needed, but not always everything I wanted when I wanted it. I did not have assigned chores because it was ALL my house, too. I did whatever needed to be done. I did not get paid for it because people do not pay you to work in your own house. They showed me the difference between good debt and bad debt. I actually had a credit card before my parents did, but I knew how to use it responsibly. I still use my cards all the time, but I always pay them off every month. I prefer new cars, but I don't have to have one all the time. I buy new and drive them a long, long time. My current vehicle is a 2008. It's my third new vehicle since I started driving in 1986. I bought my own house at 29. I never pay full price for anything. I watch sales. I keep a well-stocked pantry, so I don't run out of things. I live in a small town, so running out of something would mean having to pay a lot more for it at my local store or spend gas to drive 40-100 miles to get what I needed, so I plan ahead. I cook most of the time. Eating out is saved for vacations and special treats with friends. I won't pay for satellite radio, a cell phone plan, or premium television. I mow my own grass, wash my own car, and clean my own house. I know how to sew, so I do my own clothing alterations. I'm getting ready to make some custom curtains for my laundry room.

    My bills are never a surprise to me. I know the amount of all the fixed bills, and I can estimate the ones that vary. I know exactly how much I have in my checking account, in investments, and charged on my credit cards.

    I've done this so long I can do it in my head. Since you're starting out, write it down. Seeing it on paper may help you keep track of it, too. Don't beat yourself up over things that are already done. Learn from it and move on.
     
  11. waterfall

    waterfall Virtuoso

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    Jun 29, 2012

    scmom- I'd like to know what app that is too. Sounds cool!

    One thing that has really helped me save more recently is to take a certain amount of money out in cash each month for just "fun" money. This is what I can spend on eating out, happy hours, shopping, entertainment, etc. I found I was spending too much on the "wants" and not saving enough each month. It really helps me to have the visual there of how much left I have each month. For example, my best friend is coming out to visit me at the end of July, so I know to save most of my "fun" money for when she's here.

    I have also been trying to cut back on my grocery spending but it is hard. Things are very expensive here. Last week I tried my best to get very little for the week (I had less than 15 items, all food and no other things to drive up the price) and still ended up spending 50 bucks! I even tried really hard to just buy a few things that would stretch for several meals- but I have been trying to eat healthier too and all of that produce costs a lot. Other necessary things like cleaning products or toiletries really drive up my grocery bill when I need them too.

    I recently started online banking which I really like a lot. I had avoided it with fear of fraud and all that, but it is so nice to just be able to log on and track my spending and see exactly where I am for the month.

    I also make sure to "earmark" any "extra" funds I'm getting so I know exactly what they need to go towards. For example, this summer I'm making a little under 2,000 for summer school after taxes. I already have planned to use this money for new furniture for my apartment and my Christmas plane tickets. That way my "new big" expenses are out of the way. I should also be getting about 700 dollars as a "pay for performance" bonus from my previous district, which will be paying for my car insurance for the next 6 months. If I get any "extra" money like that, I try to pay for the whole 6 months at once when they send me the bill so that eliminates a monthly bill I have.
     
  12. princessbloom

    princessbloom Comrade

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    Jun 29, 2012

    Budgeting is the way! I'm 27 and married. My husband and I have a strict budget for ourselves because we're trying to build up our savings and put money away for our future.

    Each of us receives an "allowance" that we take out at the beginning of each week as cash and we use that money as our "entertainment" money. (Meaning anything that's outside of groceries, gas, bills, etc.) So, if I'm shopping and I see a shirt that I want then I pay cash. If we go to dinner, we pay the cash. Stop at the convenient store for a soda? Cash! Once it's gone for the week then it's gone. Have to wait until next week! If we purchase a book online from Amazon (which we do often!) we have a special jar in the house which we place the cash in (since we have to use the bank card for online purchases).
    Likewise, if either of us happens to have extra cash from the week then we put it in the jar.

    The cash in the jar builds up and we use that for big purchases. Like right now we've accumulated $200 in the "jar" so we're going to use it to buy new flowers for our front yard.

    It's worked great for us! You really have to be disciplined though. It holds us very accountable for our spending and has helped to cut down how reckless we were in the past.
     
  13. 1st-yr-teacher

    1st-yr-teacher Comrade

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    Jun 29, 2012

    This is pretty much what I do and let me tell you how great it felt to delete my "car" payment section of my budget this month! I paid it off in June....such an awesome feeling. Unfortunately, the majority of my car payment is going to student loans but that is okay.

    I also would suggest trying to find a class called, "financial peace university". It is a class by financial guru Dave Ramsey. You can often find these classes at a local church. I took one at my church and it really helped me understand how important it is to be careful with my money. Now, I am no where near following his steps...I am trying my best to save up my $1,000.00 emergency fund. But I will get there someday!

    If you don't want to take his class, you can always buy his book. It is a good read and goes over the basics. His class really dives into his plan along with giving information on investing your money and all that.

    Good luck!

    http://www.amazon.com/The-Total-Money-Makeover-Financial/dp/0785263268

    Here is the book I mentioned.
     
  14. Irishdave

    Irishdave Enthusiast

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    Jun 29, 2012

    The first thing you should do is set up a budget.
    The second thing you should do is set up a budget.
    The third thing you should do is set up a budget.
    Did I say, "set up a budget?"

    If you have silver spoonitis (I sure did ) you have to force yourself to think "poor."
    Start saving asap even if it is just a saving account at a bank.
    If you have a good car start saving for a new one if you have saved enough to buy one with cash you have done a good job of saving, (you don't have to buy it, just save that much) a cash payment amount (for a car) is also a good down payment on a home.
    there are many computer programs and apps that will help you with budgeting.

    Did I say, "set up a budget?"

    Divided up the items that you are buying as :
    Need..........Want............Will buy "tomorrow/later"
    Shelter....................19" TV .......................52" TV
    food........................Hamburger ........................Steak
    car..........................Honda .......................... Cadillac Escalade
    Clothing................comfortable shoes ..$200 heals
    Anything that doesn't fit in the 1st column goes to the 2nd and
    anything in the 2nd column that doesn't fit goes to the 3rd column and
    anything that's been on the 3rd column for a number of weeks should be dropped for a year or two.

    Did I say, "set up a budget?"
     
  15. JustMe

    JustMe Virtuoso

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    Jun 29, 2012

    I grew up poor, so I think that helped me a great deal as a teenager and young adult regarding money managemeng. When my husband and I became a couple and he introduced me to new things such as eating at Red Lobster, I truly appreciated the experiences. I held on to that feeling of it being "special" for a long time, which meant we didn't go terribly often and I didn't feel the need to, otherwise it would lose that quality. If I bought a bottle of "fancy" $10 lotion, I didn't use it every day...I saved it for when I wanted a little something special. I realize this may seem silly, but my point is this: Appreciate everything. When you appreciate the little things, you don't have such a strong desire for the bigger, more expensive things.

    That may be some of the word advice given here, but it worked for me...so I hope it makes sense to others. :)
     
  16. bison

    bison Habitué

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    Jun 30, 2012

    If you're looking for something to track your money, check out mint.com. They're a reputable company and their site works really well! I used it when I was first starting out and getting used to managing money. It was great! I'm not sure if that's the app that was mentioned, but it's very popular so there's a good chance it is.
     
  17. lucybelle

    lucybelle Connoisseur

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    My boyfriend is almost obsessed with keeping up with his finances. He has a spreadsheet that goes back like 8 years that shows what he spent his money on every single day, totals for months and year. Every single day he checks his bank accounts and updates his spreadsheet.

    I've never done anything like that. I grew up money conscious and am just really stingy so I have a good amount saved up. And since I never spend it on anything I don't keep track of every dime.

    Anyways, I think the main thing is to get in the habit of doing something that works for you. Come up with a method that you can keep up with every day/week.
     
  18. Bored of Ed

    Bored of Ed Enthusiast

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    Another vote for Mint.com, I don't remember who said their son has an app but I bet that's what he's using too. It's not everything but it's a GREAT place to start, especially if you're a bit scatterbrained about these things, but even if you're not. You need to spend a bit of time tweaking the categories and categorizing transactions to make it work, especially at the beginning, but then it really helps you flag the areas that need attention and keep track of how you're doing on your budget (for example, it shows me literally at a glance that I've been about $50 over my grocery budget for a few months now. So now I know either my growing family needs to budget more for food and trim somewhere else, or I need to examine my grocery spending and see where to cut that.) Of course the first things to do are put in the non-negotiable items and the easy things that don't change from one month to the next (usually the same things - e.g. rent, insurance payments). Then the other budget items you'll have to just pick a starting point and tweak as you see what is and isn't working.
     
  19. hbcaligirl1985

    hbcaligirl1985 Cohort

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    Jul 1, 2012

    Thanks everyone!!
     
  20. waterfall

    waterfall Virtuoso

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    I realize this is a dumb question since so many people are recommending it...but I went to the mint.com website and I'm a little nervous that they're asking to get into my bank accounts...is this really safe to do? I was envisioning something more along the lines of me manually plugging in what my monthly income is and having them figure out stuff from there rather than getting directly in to my bank account.
     
  21. Bored of Ed

    Bored of Ed Enthusiast

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    I was also skeptical but it gets very good reviews and endorsements, is from a reputable company (they make paid software also) and once I did take the plunge I haven't had a single problem. The benefit is that if you're not big on cash (I have always been a plastic girl, now I sometimes pay by debit just to have it go on mint automatically), it keeps track of purchases for you. It won't know what you bought but will know where you spent, which helps a lot. You no longer have to do a lot of writing down every single thing to get your budget straight, you can just check in at the end of the week and it's been done for you. You only need to start itemizing if there's a problem and you really want to examine where it's going wrong, like in my grocery situation, now that I have time to breathe on vacation I'll be reading through my receipts to see if there's something throwing me off track or if we really do need everything we're getting at the prices we're getting.

    In summary, I've never gotten any spam or scam or any fishy business on any of my accounts since starting Mint over a year ago. On the other hand, the convenience and usefulness has been great. I think I'd want to use it even if there were a fee (though I might want more features in the analysis area. Since it's free, I can't complain)
     
  22. bros

    bros Phenom

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    With mint, you enter your info, it logs into your bank account a special way (Basically the bank gives mint "Read-Only" permissions, when putting it in computer terms) and mint doesn't save any of the information.
     
  23. scmom

    scmom Enthusiast

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    That was me and I just called my son and, yes, that is the program. He really likes it and finds it useful. If it keeps him from making all the mistakes we did, I'm all for it!

    I also agree with another poster - many people don't understand the difference between needs and wants and have to haves. It is an important step in growing up to clearly know and follow the difference.
     

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