Personal Finance General

Is there enough interest in personal finance to have a general? Let's try! If you have any suggestions for this post, they can be incorporated in future threads. >I have $x / £x, what should I do with it? 0. Know where your money is going. Track your outgoings, make a budget, reduce obvious excesses. 1. Build an emergency fund. At least three months expenses, preferably more. 2. Pay into employer-matched funds. Matched pension contributions and the like are free money: take it! 3. Repay high-interest debts. It's impossible to save with debt interest eating away at your income. 4. Contribute to an IRA (US) or ISA (UK). 5a. Save more if you feel like it. 5b. Have some fun! See also the flowcharts on /r/PersonalFinance and /r/UKPersonalFinance >Goals Keep in mind the acronyms SMART and PSPI: Specific – target a specific area for improvement. Measurable – quantify or at least suggest an indicator of progress. Assignable – specify who will do it. Realistic – state what results can realistically be achieved, given available resources. Time-related – specify when the result(s) can be achieved. Protection – life insurance is important if you have a young family or are the main breadwinner. Income Protection – don't let losing your job immediately ruin you. Savings – regular savings such as pensions and savings accounts. Investments – lump-sum investments. >Budgeting The first step is to be aware of where your money is going: 1. List your certain monthly incomes (job pay, etc) 2. List your certain monthly expenditures (rent, bills, etc) 3. Estimate everything else (like how much you spend on food) 4. Revise your estimates as the month goes on Once you know that, you can predict future months and start setting SMART budget goals like "I'm going to spend $50 less on eating out next month." Keep it up! It's tough going at first, but it becomes easier! >Tools http://ledger-cli.org http://hledger.org https://www.youneedabudget.com (commercial) https://www.gnucash.org A spreadsheet >Other resources https://reddit.com/r/PersonalFinance https://reddit.com/r/UKPersonalFinance http://www.bankaccountsavings.co.uk http://plaintextaccounting.org >Do you count every penny? Do you ever have fun? I do count every penny, although I am typically a little out until I check my bank statement at the end of the month. I don't let this get in the way of having fun. Being confident and certain in my financial situation lets me relax more than when I was much more fuzzy. >Discussion starters What are your goals for the remaining half of this year? For next year? How do you plan or budget? What situation do you want to be in when you retire?

>How do you plan or budget? I use hledger and emacs org-mode to track my spending and forecast. hledger (and ledger) use a simple plain-text format for tracking spending, and org-mode has a convenient feature for inserting some text into the correct place into a file split up by dates. So I use org-mode to enter things, and hledger to generate reports. I track everything. I've been doing this for about a year now, and it's really made me much more aware of how I spend my money, and reduce how much I waste. It's no exaggeration to say that I would be lost if you suddenly took away my journal file today. I've also played around with importing my hledger data into InfluxDB and drawing pretty pictures with Grafana (pic related). I'm not sure if I'll keep doing this, but it was a neat idea if nothing else. My forecasting is very simple: I just have transactions in every future month, up to the end of the year, "spending" my monthly budget and taking out anything else I know about (like rent). It took a few minutes to add in these transactions when I started a new journal file in January, and I tweak them occasionally as long-term changes happen to my spending. It's pretty rough, but is enough to give me some peace of mind. >What are your goals for the remaining half of this year? For next year? I don't have much in savings, so my goals this year are putting much more aside for that. In addition, I have an interest-free £2000 overdraft in my bank account (it's a graduate account, so the bank assumes all graduates are poor as dirt for the first few years) which I need to pay off next summer, but until then I'm going to put that £2000 in a 5% interest account and make a small bit extra.

Never knew about ledger-cli. Thanks OP.

>>3470 Do you currently use another tool to track your finances, or are you just starting? I used to have a big spreadsheet in OpenOffice Calc, but it got pretty unwieldy after a while. I also find that entering brief descriptions of transactions rather than just amounts helps me be more aware of where money is going.

>>3476 I'm just starting. Well, I don't really think much about finances yet so I'm not making any substantial amount of money. Actually, none at all currently. But I'm always interested in cool programs that'll help with productivity if I require it one of these days.

I make $500 bi-weekly. Is there hope for me? I've been cooking for myself more and more, eating cheap produce and meat from the grocery store, making breakfast and coffee to see me through the day and some lunch or dinner after work. On days off I'll eat more. Cut out restaurant food and fast food altogether and don't drink soda at all. Vehicles need to be maintained, new tires, a new $200 laptop wouldn't be bad I've been looking at, an all-in-one printer for scanning old comics and stuff, and utility bills of course. I stay at home with my dad and his wife. I can't afford my own place here. We have a dog, 2 cats, and 5 kittens with more on the way. I can't save my money it seems

>>3492 I think there's always hope, lainon. What do you think would happen if you tried putting away $50 of each paycheck? Treat it like a $50 pay cut. Would you be able to cope?

>>3541 I don't know. We're going through so much right now, it just seems to disappear in times or crises. Then I need to start from square one again.

Do any lains have experience with investing? I've been looking into diversified portfolios recently, as a thing to invest in around the end of next year when (I hope) I shall have got a decent job and built a nontrivial emergency fund. I don't have any particular goals, so I figure that putting a decent amount of excess income into a passive investment is a good way to build that up for the future. Vanguard has some funds which look good, I like the Target Retirement and LifeStrategy variations. I also came across Nutmeg, which is very much an investment platform for noobs, where you just pick your desired risk level on a scale of 1 to 10. My current thinking is to get a low-risk Lifetime ISA (for non-UK lains: an interest free account into which you can put up to £4k/year, where the government gives you a 25% bonus on top of that, and which you can't withdraw from before the age of 60 or when buying your first house) to start building up retirement savings, and a higher-risk Stocks & Shares ISA (can withdraw from at any time, no government bonus, still tax free, up to £20k deposit/year across all ISAs) for "middle-age" savings. Really, I need to figure out some more concrete financial goals than just living comfortably. While a nice goal to have, it's too vague to use as any sort of guideline, so I'm just thinking about generally good long-term investments currently.

>>3492 get an old thinkpad, they're less than a hundred and some are as powerful as regular tosoykafba 200 dollar laptops

>>4189 I would stay away from target date funds as they are known to under perform and any investment platform that invests for you because its not worth the fees they take. If you read 'Asset Allocation', 'i will teach you to be rich' and ''what works on wallstreet' they basically all say to max out tax advantaged funds, allocate them across multiple index funds and don't touch them save for rebalancing. Additionally make sure you have an emergency fund and always save before spending and youll do alright.