Rental Property Investor · Charlotte, NC · Member since 2016 · 36 posts · 10 votes
Hey everyone,
I am graduating college in a week or so, and want to be prepared to budget effectively as I start getting real income for the first time. I'm curious as to how you manage your money, any apps you use for tracking spending etc, and any tips or tricks.
Rental Property Investor · Sour Lake, TX · Member since 2018 · 38 posts · 76 votes
7y
@Eric Fitzgerald congratulations on graduating! I have used mint.com for 10 years and really like it. You can track and itemize all your purchases, net worth, net income etc to help you identify how to optimize and set goals.
My biggest piece of advice is however poor you've been living in college... Roommates, cooking at home, driving a beater, keep doing that for as long as possible. At least until you get married.
Investor · Las Vegas, NV · Member since 2012 · 119 posts · 104 votes
7y
@William Hardie this is a great approach to controlling consumer spending. Learning to delay gratification until you really can afford an item is a life changing discipline. Many banks will divide your expenses into categories too so you can see excess spending more clearly. Most people overspend on eating out and coffee. It adds up to hundreds of dollars a month that could be put to better use with very little change in lifestyle.
Real Estate Agent · Bloomington, IN · Member since 2017 · 23 posts · 9 votes
7y
Definitely keep roommates around for as long as possible. When my friends and I graduated college many of them got 1BR/1BA units right downtown, but they paid a huge premium. Live on the outskirts of whatever city you are in, and again, keep roommates. LOL and yes, Set For Life by Scott Trench is a game changer, and you are the audience he was writing to in that book.
Investor · NJ · Member since 2018 · 39 posts · 33 votes
7y
I would definitely recommend using some sort of financial planning/tracking software that works for you.
I have used both mint and personal capital. I liked the way mint pulled Zillow’s Zestimate (May not be the most accurate, but at least it tracks it) and kbb’s car values to update the value of homes and cars. I felt personal capital was geared more toward traditional stock/bond investments. If you have a simpler financial picture, these might be perfect for you.
The issue I had with both of these software packages was that I could not separate my side business or rental property from my personal assets, everything was just another one of my accounts. For both the side business and rental property, I don’t own them by myself, I have a partner. Mint and Personal Capital did not let me set my ownership percentage, which caused my net worth to be inflated from what it actually is.
I have also done custom excel spreadsheets, but they require much more monthly maintenance to update at least monthly.
I have found and started using eMoney. It allows me to separate out the side business and rental property from my personal assets and still see how my specific ownership percentage fits into my big financial picture.
If you need more info on how to get access to emoney, feel free to reach out directly.
Scottsdale, AZ · Member since 2018 · 51 posts · 10 votes
7y
@Lindel Turner
When it comes to market investing. I secon that. “Index funds” with Vanguard are the way to go. My daughter works for Vanguard but I have done a great deal of study along these lines. Mutual funds are to fee loaded. Even “no loads”.
Harrisburg, SD · Member since 2017 · 8 posts · 8 votes
7y
1. Pay off debt, save up an emergency fund and then invest in something that you have an area of expertise in.
2. Invest in what you know. So if you know local real estate, then do that, or if the stock market interests you read up on that.
ME PERSONALLY: I use mutual funds and I find them very clean, and simple to explain. It takes a bit of effort, but it is pretty straight forward, and I don't do the indexing because the returns are directly tied to the market. Market up you win, market down you lose. You can do better for a little extra effort. If you want more explanation on how to find mutual funds with great returns and what I do please reach out and direct message me. I teach Dave Ramsey Courses locally and the question "How do I Invest my money?" is one that I constantly get and is the hardest to explain. I can't show you cool tricks, but I can show you what I do to build a huge 401k or Roth IRA or taxable investing account. Just message me directly and I will try to help a bit.
Disclaimer: I am not a stockbroker and won't make any direct recommendations, I will just help you develop your theory on what you think will work for you. Showing you how to search and research these is pretty straight forward.
Midland, TX · Member since 2019 · 111 posts · 25 votes
7y
@Eric Fitzgerald
You’ve gotten a lot of good advice. As far as actually tracking your finances, I personally love excel. You can tailor it to do what you want and the self tracking makes you more involved and accountable. I literally track every cent we make and spend on excel. If you ever need any advice on budgeting or setting that up feel free to message me. I’m super cheap and like to know where every cent is every day.
@Taylor Chiu Thanks Taylor. I read the article, awesome read. As soon as you put away some money in savings, the effect of compounding interest and your money working for you creates that exponential effect of income. Also, decreasing your spending rate is much more powerful than increasing income, which is something that I didn't fundamentally understand until reading the article. (although increasing income helps, it's your rate of saving that income that really matters)
Thanks again!
Glad you liked it! One caveat is once you really minimize your expenses, there isn't much left to actively do in that arena. So you might as well turn your attention to earning more ;)
Rental Property Investor · Keene, NH · Member since 2018 · 114 posts · 73 votes
7y
I don't keep a traditional budget. Instead, I use a balance sheet that tracks assets and automatically accrues liabilities for certain expenses. When the expense is realized and a credit card balance increases or cash decreases, I make a corresponding adjustment to the accrued liability.
I also accrue for certain goal setting activities, such as saving for major discretionary purchases or setting aside money for retirement. This allows me to calculate a "net cash" and "cash net of goal setting" number that I can focus on instead of trying to manage dozens of expense accounts. As long as I keep "cash net of goal setting" above 0, I can spend money on whatever I want because I know I've already paid myself and set funds aside to meet my other expenses.
Bit of an odd take on budgeting, but they say whatever you focus on tends to grow. Using a balance sheet instead of a P&L as my main focus area has been key in helping maintain the discipline needed to grow my net worth. I'm 29 (yuck, I know) and I'm currently increasing my net worth by almost 100% of corporate finance salary each year.
Accountant · Franklin, TN · Member since 2016 · 8 posts · 4 votes
7y
@Eric Fitzgerald Good question, you are wise beyond your years to ask it. Our family uses a zero based budget using Mint. The Dave Ramsey baby steps have been a huge help to our family. It’s not sexy and takes time, but it works. I tried my own method in my 20’s and failed miserably so I gave up on my method in my early 30’s.
Rental Property Investor · Los Angeles, CA · Member since 2016 · 141 posts · 123 votes
7y
@Eric Fitzgerald
I use Mint and Personal Capital to track my bank, cc, line of credit, heloc, car payments and other income/expenses all under one system.
I think budgeting/dave ramsey style might work for people in heavy debt or focused on meeting a certain goal (early payoff student loans, etc) but for those of us who are focused on FI, as long you keep in mind each action or inaction you take has a direct impact to your FI, I think budgeting just becomes more admin work.
I recommend passively budgeting by saving/investing first and tracking your net worth monthly in Excel. Don't sweat the small stuff like groceries being $81.17 one week and $114.79 the next. Concentrate or working, learning and saving/investing.
If you save/invest at least 25% of your income, more if possible, and grow your net worth by an average 1% per month by saving, cutting expenses, generating new lines of income, investment performance and paying down debts, you will build wealth quickly.
Like many others I use Mint as well, mainly because it's free, but, it's a really useful tool to keep up with your finances. Another app I use is Budget Boss (free). It's a little known app that allows you to plug in all of your income, expenses and even dates when payments for bills occur (which can be sync'd to your calendar). What really makes this app shine however is that it forecast your finances for you as well (Up to a year). Unfortunately you have to plug in everything manually but IMO it's well worth it because of the information you gather about your spending. All on a mobile device.