Dollar, Dollar Bills, Y’all

Guess what? I am not a financial expert. Go figure! But since graduation 2 years ago I have had to handle all of my expenses on my own. Rent, bills, food, clothes, gas, vacations, emergency repairs on my car. Everything. On me. It can definitely be daunting. And now that I’ve moved to DC where the cost of living is much higher than where I was, I’ve needed to reevaluate my budget all over again.

My dad is very conservative about money and has instilled the importance of saving into my brain. Saving is super important and whenever I create a budget I always make sure to “pay myself first.” Even if it’s only a $100 or $200 a month I absolutely make sure to save just a little bit of money into an emergency account. It is so important to have an emergency account for those unforeseen situations. You lose your job. A trip to the emergency room. Your car breaks down and it needs extensive repairs. My emergency account would cover all of these types of expenses. I try to have at least 3 months of living expenses in my emergency account, but ideally I would like to have around 6 to 9 months of living expenses in that account. Still working up to that goal (hey I’m only 24).

I also have a Roth IRA that I try to put money a consistent amount of money into every month and I have a super savings account that I try not to touch ever. This super savings account is for bigger, longer term savings goals like buying a house.

Another piece of advice my dad gave me was to always pay off my credit cards in full every month. Don’t get yourself into credit card debt. Don’t live beyond your means. Don’t buy that $600 bag thinking that you can just pay it off slowly on your credit card. It’s a trap! Continue to do things like that and you’ll find yourself in a lot of hot water (and a lot of interest and debt).

One of the greatest tools for me in managing my money has been Mint.com. It’s a fabulous resource that allows me to stay on top of my budgets and spending. I am able to link all of my checking accounts, savings accounts, IRA, credit cards and even loans and assets all in one place. I don’t have to log into 3 or 4 different websites to see my transactions and balances. Another bonus of Mint.com is I am able to catch fraudulent activity super quickly. As soon as a transaction hits any of my accounts I can see it right in the Mint.com app and I can nip it in the bud (this happened to me twice in the last 6 months, ugh).

My final personal money tip is figuring out what spending is important to me. Of course I have my fixed expenses like my car payment, utilities, insurance, etc. But there are some expenses that are more flexible. I was willing to spend a bit more on rent to be closer to work, in DC, and live in a nice place. I am also willing to spend a bit more on food since I like buying organic produce which is typically more expensive than conventional produce. I also enjoy going out to a restaurant for dinner or drinks a few nights a week. But my spending on clothing is super low since I am just not a shopper. Figuring out what areas of your spending are most important to you is a great way to match your budget to your lifestyle.

Like I said I am no financial expert, but these are the ideas that help me make the most of my money. Maybe they’ll help you too!

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