December 23, 2013

Finances- start now & every little counts

I am not wealthy by monetary terms but I meet my obligations somehow. I think I’m good with money but we can always be better. I have made do with what I have. I have not always earned much as I would like to but I’ve made it work. I’m not in debt and I am looking at how I’m going to really plan for retirement & start some serious savings now that I’m 30.
I’ve always had the entrepreneurial bug. In high school I started selling little potpourri & scented candle packages, then in college beaded jewellery to make a little pocket money. Being raised by a single parent, I never ever did like to pressure my father for money. I tried to hustle and saved as much of my lunch money as I could. My father used to call me the “Black Jew”. ^_^.
My love for money and to learn how to make money make money helped me choose my major in college to do Finance. I originally signed up for Accounting but changed to Finance. It just fascinates me. I’ve been working in the financial industry from high school as most of my summer jobs were at a financial institution. Now I am the Treasury Manager at an investment company.

I thought I’d share a bit with you all:
·         Start now!
Don’t worry that you’re too old or you should have started sooner, the point is to START. Start small if you think you can’t do the recommended 10% -20%monthly of your salary. What you could do is to increase the pension contribution at your company, that way it comes out before it’s taxed and you can’t touch it unless you leave before the vested period.
 If you have a means of making extra money, try and use that to save.
One important note is that if you do have debt, focus on reducing the debt as the return on your savings/investment may be less than the interest rate charged.
Start by even saving just your lose change and get a piggy bank. It will add up.

·         Track your expenses

This is a very important step. Most of us know how much we earn, but do we really know how much we spend especially on little things and certain categories of expenses such as utilities and groceries. If we have nothing left in our account by the end of the month, then yes we do know we spent everything. It’s amazing sometimes when I add up everything for some things how much I really spend.

You can write it down or use a spreadsheet; or use the memo pad or an app on your phone. Track every single thing- if you tipped someone, if you gave the beggar on the road some money, MAKE NOTE OF IT!!!!!.

It’s in examining our spending habits that we can see where we can make cuts and save more especially if you can’t earn more. I also have a spreadsheet to have a visual of my major and recurring expenses so that it isn’t a surprise and you can make adjustments. For instance, I have my car insurance yearly in March; I have parties I want to go to in June-July & December, lots of birthday dinners & gifts to get in October, my own birthday in November, Christmas gifts in December & my mother’s birthday in July. I can see that some months are heavier than others and some lighter. In the lighter months I try to save up for the months that are heavier.

I cannot stress how important this is. To really see trends, I’d recommend doing tracking strictly for 3 months. I’ve been doing this for years and find it’s quite

·         Budgeting

After you track your expenses for a while you will see how much on average you spend on groceries, for instance, and budget that amount monthly. Then categorize your expenses and budget accordingly. You can examine ways to cut back or reduce your bills. For instance, to reduce your electric bill you can plug things out when they are not in use or use energy saving bulbs. To reduce your grocery bill, you could buy in bulk with a friend or use coupons. Try googling ways to save money and also how make money online for instance.

I will stop here and post another time about investing and other money matters. I don’t want to overwhelm you as I could go on and on. ^_^.


Here are a few articles I’d like to share for further reading: