Today I received my second “big girl” pay check ever! Although it hurts to see about 25% of my check go to taxes, (NY taxes are insane!) I’m still earning the most amount of money ever in my life!
I also have more bills than ever before because I’m on my own now and have my first apartment. I never had to worry about money other than my monthly cell phone bill before. Living from check to check did not bother me at all. Now I worry about earning enough money to afford my new independent life and not spending it all before the bills come in!
I went to the smartest man I know to make sure I had a solid plan to be prepared for the deadly monthly pile of bills. Naturally, this man was my dad. I’m very lucky that I have a dad who is patient, good at explaining and I must say he’s pretty smart. I am going to share my dad’s words of wisdom on his budgeting technique.
I will be making a separate daily post for each of these sections. Otherwise I think we would all be overwhelmed by the post length and amount of math!
Let’s start with…
The key here is to make sure you set obtainable goals over a reasonable time span. You need to be honest with yourself. Compare how much you make to how much you spend. How much money can you afford to set aside?
This is where you are going to get your information for key decisions. There is no point of putting money into savings if you are going to need to make transfers and withdraws all the time just to get by.
*Chances are if you’re making a lot of withdrawals and transfers from a savings account to a checking account, you are wasting money on bank charges. I found out the hard way, check your bank charges today!*
My first set of goals was to work to a place where I could have money set aside for bills and monthly expenses in advance, as well as have $1,000 in my savings account by summer.
I figured out that I could do this by taking $550 out of every check to set aside for bills and monthly expenses. I also decided to start saving 10% of every dollar I make in my long term savings (aka 10 cents per dollar). Eventually I’d like to save 30% of my check, but I know that I am not financially ready for that quite yet.
In my next post I will share with you what my dad said should be my long term goals. These goals I will work on over my life time. I will share how I set up my bank accounts and my dad’s advice for setting up saving accounts. Later I will post about estimating how much you are spending and how to stay ahead.