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robot_parade · 02-01-2005, 07:03 PM

The above are all great - except always remember to keep one or two credit cards, to build your credit rating, and for the 'oh crap, no money to pay the rent' moments.

Here are two more:

1) Keep an emergency fund. This way you can avoid using the credit card for emergencies, or begging friends/relatives, or (God forbid!) one of those check-cashing places (tip 1 1/2: never ever use them, even if you have to go hungry! The 'interest' rate makes the worst credit card look good, and you can easily get 'stuck' needing them every single month).

2) Keep all your damn receipts. All of them. If you don't get a receipt, ask for one. If you can't get one, right it down. Use a personal finance program like quicken, etc. We've been doing this for the past year or two, and it really helps to see where all the money goes. I use gnucash, which is free - it is a double-entry system, meaning every dollar you spend from (for instance) your checking account goes toward a specific 'expense'. Balance your checkbook against your finance software so you know you haven't forgotten or lost anything.

3) After you've saved your receipts for a few months, fire up a spreadsheet program and work out a budget. Put in all your regular monthly bills (rent, cable, utilities, etc), and then add in estimates (using the previous months as a guide) for other expenses. Add them all up, and subtract from your monthly income. If the number is positive, that is your 'surplus', and should go into savings. If the number is negative, you are in deep crap, and you need to either cut out some expenses or start making more money.

I've been totally anal about the above for awhile, and it does take some time, but it is very much worth it. Every dollar I've spent is accounted for, so I can see where the waste is. The only concession I make is with cash - I always round cash purchases, and then 'adjust' the accounting program when needed - which usually isn't very much because the rounding averages out. When I check my bank account online, I balance it and make sure the 'cleared' amount is what my financial program thinks it should be. If it isn't, I find out why.

02-01-2005, 07:03 PM	#7 (permalink)
robot_parade Junkie Location: San Antonio, TX	The above are all great - except always remember to keep one or two credit cards, to build your credit rating, and for the 'oh crap, no money to pay the rent' moments. Here are two more: 1) Keep an emergency fund. This way you can avoid using the credit card for emergencies, or begging friends/relatives, or (God forbid!) one of those check-cashing places (tip 1 1/2: never ever use them, even if you have to go hungry! The 'interest' rate makes the worst credit card look good, and you can easily get 'stuck' needing them every single month). 2) Keep all your damn receipts. All of them. If you don't get a receipt, ask for one. If you can't get one, right it down. Use a personal finance program like quicken, etc. We've been doing this for the past year or two, and it really helps to see where all the money goes. I use gnucash, which is free - it is a double-entry system, meaning every dollar you spend from (for instance) your checking account goes toward a specific 'expense'. Balance your checkbook against your finance software so you know you haven't forgotten or lost anything. 3) After you've saved your receipts for a few months, fire up a spreadsheet program and work out a budget. Put in all your regular monthly bills (rent, cable, utilities, etc), and then add in estimates (using the previous months as a guide) for other expenses. Add them all up, and subtract from your monthly income. If the number is positive, that is your 'surplus', and should go into savings. If the number is negative, you are in deep crap, and you need to either cut out some expenses or start making more money. I've been totally anal about the above for awhile, and it does take some time, but it is very much worth it. Every dollar I've spent is accounted for, so I can see where the waste is. The only concession I make is with cash - I always round cash purchases, and then 'adjust' the accounting program when needed - which usually isn't very much because the rounding averages out. When I check my bank account online, I balance it and make sure the 'cleared' amount is what my financial program thinks it should be. If it isn't, I find out why.