misc

This isn’t writing related at all, but I think it’s super important to learn how to manage your finances. It’s an essential life skill that will have a huge impact on your life, yet so many people are really bad at it.

It doesn’t matter how old you are or how much money you make, you will use your money skills until the day you die, so you might as well get good at it, the sooner the better.

I’m considering starting a finance blog, but for now, here are some bullet points of what I’ve learned over the years.

Track all your spending and income

You need to gather raw data before you can assess the situation, so you need to track where all of your money goes. Track every single dollar that comes in and goes out.

I use mint.com, which is free.

I recommend doing this for 2-3 months before you move on to the next step so you get a sense of what you make and what you spend in an average month.

A lot of people say you should use cash as much as possible because it’s too easy to overspend if you use credit cards, but I disagree. I pay for everything I can with my credit card, and pay if off at the end of every month. This improves your credit rating, and it’ll be automatically tracked in mint so you know where your money’s going.

Make a budget

Step 1: Figure out the totals for your income and expenses. Hopefully, your income is more than your expenses every month.

fixed – same amount every month (rent, car payment, student loans, health insurance)
variable – the amount changes month to month (groceries, entertainment, clothing)

Step 3: Calculate the minimum amount of money you need every month. Always know this number.
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