Money Management Fun

I'm not always organized, but with money I am. Super-organized. I actually enjoy making a budget and balancing it... particularly on payday. But I'll do it any day, especially when I have a big school deadline to procrastinate! These are some of the strategies I've learned from my own experience in keeping track of money.

 

• Note every little thing you spend (or make) money on. I take all my receipts, and I even carry a small sticky note pad and a pen inside my wallet for writing down those transactions that don't have a receipt- like loading cash onto my Metro card or getting paid for babysitting. I store them in a couple manila envelopes. For most purchases, I throw out the receipt after a month or two.

 

• Record your transactions in your personal budget software or paper ledger every single evening. That's when it's easiest to remember what I spent and where, particularly when I paid with cash. It's not a big job; usually I don't have more than 1 or 2 transactions a day. This ritual also reminds me of how much I have left to spend in my budget categories; if it's been 2 weeks since I last entered any data, I may not have as much to spend at Starbucks as I thought I did.
• Have a $1000 minimum emergency fund, and keep adding to it. Especially if you drive. When I was 19, I hit another car at very low speed in the parking lot and left scratches on two of his side panels. Rather than have my insurance premium take a hit for the next several years, I paid the owner out of pocket. Actually, I wrote him a check, not a cashier's check, just a normal check. If I were him, I'm not sure I would have accepted that; after all, I was really young, and at the time of the accident I was wearing a fast food uniform! I had the funds in my account though, and while it wasn't fun to see my hard-earned money go to that, it was a blessing to realize I had the money and this wasn't going to hurt me.

• Adjust your budget percentages if they aren't working. I have done this countless times. I don't like constantly borrowing from one category to pay for another; it makes no sense. Sometimes it hurts to see what percentage of your paycheck is needed to pay for a bill or a spending habit you have, but a budget has to work. Make your percentages work for what's going on in your life right now, and if you find a way to cut expenses or kick your indulgent habits, you can readjust then. I'm kind of extreme; if one of my budget categories dips below zero, I'll often rewrite it to zero and pull the rest of the funds from non-essential categories or categories where I've built up excess. For example, I just paid my dad for my portion of the auto insurance. I knew this was the time of year to pay, but I expected that only 6 months' insurance would be due; actually, the premium for the entire next year was due all at once. I paid what I could out of the insurance category and stole the rest from my gifts and spending categories.