I love infographics! This is my first draft of creating a way to share my progress on my financial goals without literally showing my bank balances. As you can see, I have a ways to go, but I have a plan for how I'm going to get there so I will update these based on my progress.
My goal is to be debt free (consumer debt and a personal loan) AND have some emergency funds in place in 2 years, I wrote out a whole plan of how I plan to get there which I will share when I have made more progress. This blog is about action, not about planning!
I'm not letting perfect be the enemy of good enough but the infographic for May will be a bit more refined. The data is all from Mint but I wasn't carefully categorizing my spending based on these simplified categories... also it was a tough month for pets which was abnormal... but luckily I had just gotten my tax refunds so I was able to handle it without digging into more debt than I already have.
There are a lot of ways to budget and I have tried a few different ones, always with some variation. Where I landed recently is that I have 1 checking account that is my automatic account. This account gets my direct deposits and also pays my bills automatically. I also just set it up to pay off my regular credit card balance in full every month so that I cannot go over. This account has all my savings accounts as well, it's very easy to make a new savings account and rename it so I currently have:
- Emergency Fund
- Howland College Fund (dedicated to puppy emergencies)
- 2018 Vacations
- Car Maintenance (for oil changes)
- House Projects (all big house projects seem to cost about $3k-$5k I'm noticing)
- New Car (I want one somdeay... only has $10 in it today)
- Gifting (trying to save up money here for gifts, though this will sit empty for a while as I do handmade gifts over purchased gifts)
- Makerspace (When we open we'll need some stuff so I'm trying to save now)
- Opportunity Fund (this will be for invitations to thing, events, day trips, etc.)
- Tattoo (Good tattoos aren't cheap! Better to save up for it)
Then I set up a second checking account which is my spending bucket. I set a budget for the month and my spending money transfers to this card. This card covers food, drink, shopping, gas. It has a savings account tied to it as well and I try to leave a little bit behind so that it might grow into enough for me to buy some things I have been wanting but holding off on purchasing.
I ended up putting too much on my credit card that I couldn't pay it off in 3 months so I got a new card with a balance transfer and I have set up automatic payments to get that cleaned up before interest will be charged. I feel much more relaxed with all my bills on autopay. Now this doesn't mean that I sit back and assume it's all working out, I vigilantly check my balances pretty much every day. This is how you can catch fraud, prevent overdrafting the account, and deciding that I'll be better off not going out to dinner.
I have been using the website and app Mint for several years and it has helped me keep an eye on my finances (especially when I was an Americorps and was pretty much broke for the whole year), though I am starting to think that my autopay account should not be on there and just have my budget account because that's one one to watch. I'll be slowly building up a buffer in the autopay account, ideally a full month of expenses, like YNAB recommends, so that I'm living on last month's income as opposed to this month's income.
I'm excited to develop this infographic and continue to report monthly on my big goals. In decluttering my house and life, getting the financials set up is the biggest piece of the puzzle. I took a couple trips last year but had trouble relaxing because I didn't have a lot of cash on the trip. A trip is only fun if you not only get there but also have money to go explore and do things like visit museums, try the local foods and get around. When every move on a trip has to be balanced and weighed it really sucks the relaxation out of a vacation. So getting my house in order, and then saving up for a big international trip in a couple years, will make sure that I can actually relax while I'm out exploring the world... speaking of, should probably budget for renewing the passport right after achieving the 2 year plan!