I've been reading several personal finance blogs lately as part of trying to both clean up past mistakes and prevent new ones. Some of the ones I'm liking a lot are Get Rich Slowly and The Simple Dollar. I've decided to share a little bit of what I'm doing, mostly to help keep myself on track.
Before we got married, TBWITWW had a good job that paid quite well. I on the other hand, was a financial idiot. I had a decent job, but not a great job, a mountain of bad credit, some very poor choices under my belt, and no system for tracking what I had coming in and going out (and more importantly, what should have been going out). After the wedding TBWITWW moved up to the Greatest City in the Known Universe (abbreviated CHICAGO). Unfortunately, our timing was quite bad. She was unable to find employment for almost 2 months, and then took a seasonal, part-time job for just over minimum wage. Needless to say, bills were not getting paid and credit cards were how we paid for almost everything.
Flash Forward 4 Years
TBWITWW has a decent job again, we're paying off the credit cards we lived on that first year to the tune of almost $1000/mo and my financial management skills have changed very little. We've just found out that we have to move because our building has been sold, and is being gutted (the second time in less than a year). We decide to see if we could possibly buy a home and avoid the risk of this happening again. We get the credit check, and we're in pretty bad shape. This is my wakeup call. I finally make a committment to do something about our financial situation. We got ourselves a copy of Microsoft Money, and a computer to run it on, and for all of 2006 we tracked our spending and our income. Just tracking it caused an improvement, because suddenly, we could see that we were spending far to much on things that weren't necessary. Also, we stopped paying late fees, over draft fees, etc.
At the begining of this year, we started tracking our cash spending as well, last year, we would record that we'd gotten $20 from the ATM, but not where that $20 had gone. Also, we looked at our spending for 2006 and set up a monthly budget. Suddenly, at the end of the month, we're able to look at our accounts and say "We should put some of this extra money in our savings account." rather than "Crap, we have to pull money from the savings account to buy groceries again." It's a great feeling. Our goal is, that by my 30th birthday (in July) we will have all of our credit card debt paid off, and a balance above $2500 in our savings account. We're quite happy about this. The best part is we're actually living better now too. We can get new clothes when reach the "unprofessional" stage, rather than waiting till the "unwearable" stage. We can go out for a nice dinner together because we know we haven't spent all of our dining out budget on fast food and coffee.
Still to come
In the coming months, I plan to post a bit about budgeting, saving, and spending (Including how we spent as much money last week as we normally spend in a month, and how I'm actually okay about it... mostly); progress we're making; and how we're dividing up our spending. I'll post progress updates as well. Hopefully you'll find it either interesting or educational.