How do I become a financial adult?
May 25, 2011 4:29 PM Subscribe
How can I become a financial adult?
I'm becoming increasingly concerned that I'm not managing my finances appropriately, and I'll be screwed in the long term. I'd like to learn how. Please point me to the best resources you know of.
Here are some data points:
- I'm in my late 20s, Australian, currently living in the EU, about to start first adult job after years of grad school (I was fully funded for grad school).
- I have a credit card that my mum, bless her heart, has co-signed, and it's historically saved my ass. I am concerned about my credit rating, as there was a mix-up with my final utility bills from my house back in Australia - ie, they sent some bills to my ex's house, and I only heard about them when they sent a debt collection notice, and I didn't receive any of my electricity bills at my new address until I called the company (I was very careful to change my address before leaving). I've never taken out a loan or defaulted on any other payments.
- I've always kept a high interest internet only savings account and skimmed off a little of every take home pay. That account usually sat at around $1,000 - $3,000. It got cleaned out in the move.
- I'm starting a new job at minimum wage soon, but it's in my desired career track and has good prospects. I am APPALLING at talking to employers/clients about money. I get uncharacteristically coy and nervous. I've done extensive freelance work for people back in Australia and never been paid because the thought of asking for money makes me nauseous. This is what I mean by 'financial immaturity.' I still have no answer when people ask me how much I want to earn, it's just never been on my radar before.
- My partner, to put it mildly, sucks with budgeting. This is his first post-school job, and we're often broke at the end of the month (supporting two adults on one wage contributes to that, too; also, our health insurance costs are much larger than we were told by his employer). Before the inevitable DTMFA pile on, this is something we talk about regularly and often. We're just both similarly clueless about money, and trying to learn what to do now we're out in the real world. What resources can I point him towards?
- I haven't thought of superannuation and retirement. I have super funds scattered all over Australia, and I'm mightily intimidated by the thought of rolling them over into one, let alone choosing the one true super fund.
- Our long-term goals are to have some savings, appropriately invest those savings, and maybe buy property (this last one is flexible). Medium term, we'd like to have a small yet perfectly formed wedding back home. Short term, both our parents have been helping us out now and then, which we're enormously grateful for, but we'd like to not ever have to ask them for help again. Oh, and it would also be nice to have a little disposable income to, you know, buy socks and underwear and junk.
We get paid monthly - I'll be taking home 1,200 - 1,300 euros a month*, he takes home 2,000. Rent is 1,400, insurance is 200, internet 50, both our phones 100.
Help me out, hivemind! How can I grow the fuck up and be an adult with my money?
* minimum wage in this country is about to increase, but I don't yet know by how much.
I'm becoming increasingly concerned that I'm not managing my finances appropriately, and I'll be screwed in the long term. I'd like to learn how. Please point me to the best resources you know of.
Here are some data points:
- I'm in my late 20s, Australian, currently living in the EU, about to start first adult job after years of grad school (I was fully funded for grad school).
- I have a credit card that my mum, bless her heart, has co-signed, and it's historically saved my ass. I am concerned about my credit rating, as there was a mix-up with my final utility bills from my house back in Australia - ie, they sent some bills to my ex's house, and I only heard about them when they sent a debt collection notice, and I didn't receive any of my electricity bills at my new address until I called the company (I was very careful to change my address before leaving). I've never taken out a loan or defaulted on any other payments.
- I've always kept a high interest internet only savings account and skimmed off a little of every take home pay. That account usually sat at around $1,000 - $3,000. It got cleaned out in the move.
- I'm starting a new job at minimum wage soon, but it's in my desired career track and has good prospects. I am APPALLING at talking to employers/clients about money. I get uncharacteristically coy and nervous. I've done extensive freelance work for people back in Australia and never been paid because the thought of asking for money makes me nauseous. This is what I mean by 'financial immaturity.' I still have no answer when people ask me how much I want to earn, it's just never been on my radar before.
- My partner, to put it mildly, sucks with budgeting. This is his first post-school job, and we're often broke at the end of the month (supporting two adults on one wage contributes to that, too; also, our health insurance costs are much larger than we were told by his employer). Before the inevitable DTMFA pile on, this is something we talk about regularly and often. We're just both similarly clueless about money, and trying to learn what to do now we're out in the real world. What resources can I point him towards?
- I haven't thought of superannuation and retirement. I have super funds scattered all over Australia, and I'm mightily intimidated by the thought of rolling them over into one, let alone choosing the one true super fund.
- Our long-term goals are to have some savings, appropriately invest those savings, and maybe buy property (this last one is flexible). Medium term, we'd like to have a small yet perfectly formed wedding back home. Short term, both our parents have been helping us out now and then, which we're enormously grateful for, but we'd like to not ever have to ask them for help again. Oh, and it would also be nice to have a little disposable income to, you know, buy socks and underwear and junk.
We get paid monthly - I'll be taking home 1,200 - 1,300 euros a month*, he takes home 2,000. Rent is 1,400, insurance is 200, internet 50, both our phones 100.
Help me out, hivemind! How can I grow the fuck up and be an adult with my money?
* minimum wage in this country is about to increase, but I don't yet know by how much.
That's slightly unfair as I see you're not currently debt. Let me amend the last line to read: ...it shouldn't be working until you die, wearing the same socks you have on now, desperately hoping nothing bad happens since you don't have any savings.
posted by 2bucksplus at 4:47 PM on May 25, 2011
posted by 2bucksplus at 4:47 PM on May 25, 2011
Yeah, if you guys are splitting rent, then you're taking home roughly 3400 euro, but your rent is 1600 euro (with insurance), which is about half that. That alone is probably too much. You need to find a cheaper place to live.
posted by King Bee at 4:55 PM on May 25, 2011 [1 favorite]
posted by King Bee at 4:55 PM on May 25, 2011 [1 favorite]
You may want to get this guy's book. He writes for a specific audience. You are that audience.
posted by quadog at 5:17 PM on May 25, 2011
posted by quadog at 5:17 PM on May 25, 2011
I don't know where you live but let's assume it is a major metropolitan capital like London, and that it works there the way it does in New York where 50% of take home for housing is painful but normal. Otherwise, yes you are paying too much.
You should however be very pleased you have no debt. We're 40 and broke as a pair of stones but also very aware that we're less fucked than the billions of people we know who are both broke and carrying around a ton of consumer debt.
The first thing you need to do is figure out what you are spending. Never mind budgeting; track everything. Then divide it up into categories like these. (Do not forget gift giving, which everyone does. You will give a lot of wedding presents in the next 15 years!)
10 cents of every euro you take home goes into savings. And stays there. Where you forget about it so that 12 months from now, when you have €4K+ in savings, you don't start feeling rich.
Then start trimming your expenditures. Look at things like entertainment and food spent outside of the house. Can you go to the cinema less if you get a Netflix/LoveFilm subscription? Are you buying 3 new games per month? Are you dropping a lot on lattes and work lunches? If you buy a crockpot, can you eat les take aways on week nights? Trim "are nice to have" until your expenditures look reasonable compared to your income. If you can't make it work, you need to radically reduce your rent or add a weekend job. Sorry.
When you are good at saving, months from now you can look at investing but your goal is to get good at the basics.
Additionally, you need to apply for your own credit card to build your credit. (Do NOT get a joint card with your partner. You need your own credit history.) Depending on where you live, this may be easy or hard; start with your bank. Onto this card, you charge recurring bills already in your budget, like Netflix and groceries. You then PAY THIS CARD OFF every single month without fail. You use it for NOTHING ELSE. You have no room in your budget to pay it off or to pay the interest.
posted by DarlingBri at 5:19 PM on May 25, 2011
You should however be very pleased you have no debt. We're 40 and broke as a pair of stones but also very aware that we're less fucked than the billions of people we know who are both broke and carrying around a ton of consumer debt.
The first thing you need to do is figure out what you are spending. Never mind budgeting; track everything. Then divide it up into categories like these. (Do not forget gift giving, which everyone does. You will give a lot of wedding presents in the next 15 years!)
10 cents of every euro you take home goes into savings. And stays there. Where you forget about it so that 12 months from now, when you have €4K+ in savings, you don't start feeling rich.
Then start trimming your expenditures. Look at things like entertainment and food spent outside of the house. Can you go to the cinema less if you get a Netflix/LoveFilm subscription? Are you buying 3 new games per month? Are you dropping a lot on lattes and work lunches? If you buy a crockpot, can you eat les take aways on week nights? Trim "are nice to have" until your expenditures look reasonable compared to your income. If you can't make it work, you need to radically reduce your rent or add a weekend job. Sorry.
When you are good at saving, months from now you can look at investing but your goal is to get good at the basics.
Additionally, you need to apply for your own credit card to build your credit. (Do NOT get a joint card with your partner. You need your own credit history.) Depending on where you live, this may be easy or hard; start with your bank. Onto this card, you charge recurring bills already in your budget, like Netflix and groceries. You then PAY THIS CARD OFF every single month without fail. You use it for NOTHING ELSE. You have no room in your budget to pay it off or to pay the interest.
posted by DarlingBri at 5:19 PM on May 25, 2011
Where I live, the homeless people are some of the folks who are most involved in the community, because they spend their time in public spaces, like parks and libraries, and volunteering at our local bike collective. They know each other. I think we as a society could learn a thing or two from that particular aspect of homelessness. Enjoy the freedom of living frugally - it gives you more time to be a part of your community.
Buy socks and underwear; don't buy junk.
Rather than setting money aside for saving, set money aside for spending. It changes the focus. Saving money is automatic; spending it is the thing that requires careful consideration.
posted by aniola at 5:31 PM on May 25, 2011
Buy socks and underwear; don't buy junk.
Rather than setting money aside for saving, set money aside for spending. It changes the focus. Saving money is automatic; spending it is the thing that requires careful consideration.
posted by aniola at 5:31 PM on May 25, 2011
My best advice:
> Refuse to succumb to the mind set that your finances are too complicated to understand or control. Spend time researching, comparing and acting. This is what responsible adults do. (But never, never put all your eggs in one basket; it's all about diversifying.)
> Spend less, save more. Reject the notion that you "deserve" more than you can afford. That may mean finding a cheaper place to live.
> Set financial goals and make a budget. Then stick to it.
> At the same time, pay attention to your net worth, which is the market value of your assets minus your liabilities. If your net worth isn't increasing steadily over time, you're doing it wrong.
> Saving for retirement is something you need to do now, not later. A good dictum to keep in mind is, "Whatever I save, it will not be enough to retire when I want to."
> There is no such thing as a "high yield" savings account. Savings are the same as cash these days, which means you're losing money due to inflation. Keep cash for an emergency, but consider putting the rest into an indexed bond fund.
> As you get more savings, ladder your invesments--3 months, 6 months, 12 months, 18 months--so that you are never too far away from cash for an emergency.
> Finally, there's no shame in starting small. Just start.
If you only remember one of these suggestions, let it be your net worth.
Good luck to you!
posted by Short Attention Sp at 5:35 PM on May 25, 2011 [5 favorites]
> Refuse to succumb to the mind set that your finances are too complicated to understand or control. Spend time researching, comparing and acting. This is what responsible adults do. (But never, never put all your eggs in one basket; it's all about diversifying.)
> Spend less, save more. Reject the notion that you "deserve" more than you can afford. That may mean finding a cheaper place to live.
> Set financial goals and make a budget. Then stick to it.
> At the same time, pay attention to your net worth, which is the market value of your assets minus your liabilities. If your net worth isn't increasing steadily over time, you're doing it wrong.
> Saving for retirement is something you need to do now, not later. A good dictum to keep in mind is, "Whatever I save, it will not be enough to retire when I want to."
> There is no such thing as a "high yield" savings account. Savings are the same as cash these days, which means you're losing money due to inflation. Keep cash for an emergency, but consider putting the rest into an indexed bond fund.
> As you get more savings, ladder your invesments--3 months, 6 months, 12 months, 18 months--so that you are never too far away from cash for an emergency.
> Finally, there's no shame in starting small. Just start.
If you only remember one of these suggestions, let it be your net worth.
Good luck to you!
posted by Short Attention Sp at 5:35 PM on May 25, 2011 [5 favorites]
Also - you can't afford that apartment on your own. It's technically within his budget, but not yours. What if he lost his job? You may want to find an apartment that is within both of your means?
posted by aniola at 5:38 PM on May 25, 2011
posted by aniola at 5:38 PM on May 25, 2011
I started using Mint.com to help tackle these exact same problems. It really helped me visualize my spending and earnings. I had always been cutting things very close, but was lucky to not get into any problems. However, the closer those calls got put me in a position just like you -- looking for a solution.
Once I began to see everything in one place on a site like Mint it really helped me see trends and set budgets. For example, I could see that I was spending a disproportionate amount of money at Dunkin' Donuts or far too much on lunches. It really helped me get in the habit of cutting back on spending in places, and remembering to move money into savings.
One thing that I did that helped a lot was to set up another bank account -- instead of just trying to save money by cutting back spending, I would transfer a certain amount over to that account each month. The physical separation of the money and slight hassle of transferring allowed me to avoid spending it -- I could leave the bank card for that account out of my wallet and be assured that I wouldn't dip into it.
One caveat: There have been far too many technical problems with Mint lately, and I hope they resolve them. The site is secure (you don't move money or pay bills there), the problems they have had have been related to updating transactions for accounts. There are other sites like it (yodlee, I think) or even software that can do this, so definitely do some research into possibilities. I think anything that can help you put every account and budget on one page can really bring you into the realm of the adults! I am almost there -- just need to cut a few more munchkins out of the diet!
posted by This_Will_Be_Good at 5:49 PM on May 25, 2011
Once I began to see everything in one place on a site like Mint it really helped me see trends and set budgets. For example, I could see that I was spending a disproportionate amount of money at Dunkin' Donuts or far too much on lunches. It really helped me get in the habit of cutting back on spending in places, and remembering to move money into savings.
One thing that I did that helped a lot was to set up another bank account -- instead of just trying to save money by cutting back spending, I would transfer a certain amount over to that account each month. The physical separation of the money and slight hassle of transferring allowed me to avoid spending it -- I could leave the bank card for that account out of my wallet and be assured that I wouldn't dip into it.
One caveat: There have been far too many technical problems with Mint lately, and I hope they resolve them. The site is secure (you don't move money or pay bills there), the problems they have had have been related to updating transactions for accounts. There are other sites like it (yodlee, I think) or even software that can do this, so definitely do some research into possibilities. I think anything that can help you put every account and budget on one page can really bring you into the realm of the adults! I am almost there -- just need to cut a few more munchkins out of the diet!
posted by This_Will_Be_Good at 5:49 PM on May 25, 2011
If you have a smaller bank or credit union, Mint doesn't work. One thing you can do is make a spreadsheet line graph that shows how much your savings, checking, and total accounts have at the end of each month.
I do this, and I can look at the graph and say "oh, that dip was because I had to pay for the dentist and had just moved into a new place, and that rapid rise is from when I got a tax refund." It gives you a good general sense of what your money is doing without giving too much detail or taking too much effort.
posted by aniola at 5:55 PM on May 25, 2011
I do this, and I can look at the graph and say "oh, that dip was because I had to pay for the dentist and had just moved into a new place, and that rapid rise is from when I got a tax refund." It gives you a good general sense of what your money is doing without giving too much detail or taking too much effort.
posted by aniola at 5:55 PM on May 25, 2011
FYI, Mint doesn't work with European banks. There were some other options recently unearthed in this Ask.
posted by DarlingBri at 5:59 PM on May 25, 2011
posted by DarlingBri at 5:59 PM on May 25, 2011
With regards to the electricity bill affecting your credit rating in Australia, I would get a copy of your credit report through Veda. Not all companies will list payment defaults with a credit agency if they are rectified reasonably quickly. If it does show up, then it will probably flag to a loan assessor and they would make a judgement call based on the amount and how long it was outstanding. As someone who used to assess small business and home loans, if there was one small amount on there and could be explained, I'd let it go if everything else stacked up, but if there were a few things it would be more likely to get declined.
posted by Kris10_b at 7:54 PM on May 25, 2011 [1 favorite]
posted by Kris10_b at 7:54 PM on May 25, 2011 [1 favorite]
I hate QuickBooks (and that is probably why Mint is slacking since Intuit took over), but if Mint doesn't work in Europe, that bigger takeaway is just finding some software that can show you trends, transactions, budgets with minimal effort. I'm sure some of these financial software packages can download transactions for you. You could do this in Excel, but you definitely want to make it as painless as possible so you don't abandon it. It is just very helpful to have someway to assess your finances as if you were a business -- how much am I spending, how much am I making, what am I doing wrong money-wise, etc.
posted by This_Will_Be_Good at 9:02 PM on May 25, 2011
posted by This_Will_Be_Good at 9:02 PM on May 25, 2011
Mint doesn't exactly work with many US banks. The product seems to be falling apart.
posted by rr at 9:12 PM on May 25, 2011
posted by rr at 9:12 PM on May 25, 2011
I am APPALLING at talking to employers/clients about money. I get uncharacteristically coy and nervous. I've done extensive freelance work for people back in Australia and never been paid because the thought of asking for money makes me nauseous. This is what I mean by 'financial immaturity.' I still have no answer when people ask me how much I want to earn, it's just never been on my radar before.
That's really the same thing - how much do you want to earn, how much are you selling your freelance work for. And to a degree the approach is similar. You do research and work out what the going rate for a particular job is. You work out if you need to flex that for specific circumstances. For example size of employer, your level of experience. You consider if the salary for a particular job is supposed to cover overtime, if there's TOIL or if you'd get paid overtime for example. As you don't say what country you're in there could be a range of answers to the what does my salary cover question. And that's how much you want to earn and your benchmark for income from employment.
If you continue to do any freelance work you work out what the going rate for that work is and you charge it. So if you talk to somebody about a piece of work you do not accept the work without agreeing a price for it - end of. You are not a charity....repeat as required.
And having agreed the price for the work you invoice your work. And if they fail to pay the invoice you send them a polite reminder. And then a more firm reminder. And then you call them. And then you send them a final reminder and take them to court.
Just remind yourself that you're trying to make a living. You would not turn up to any job knowing you won't get paid at the end of the month. You therefore will not do any freelance work in that knowledge either.
posted by koahiatamadl at 1:43 AM on May 26, 2011
That's really the same thing - how much do you want to earn, how much are you selling your freelance work for. And to a degree the approach is similar. You do research and work out what the going rate for a particular job is. You work out if you need to flex that for specific circumstances. For example size of employer, your level of experience. You consider if the salary for a particular job is supposed to cover overtime, if there's TOIL or if you'd get paid overtime for example. As you don't say what country you're in there could be a range of answers to the what does my salary cover question. And that's how much you want to earn and your benchmark for income from employment.
If you continue to do any freelance work you work out what the going rate for that work is and you charge it. So if you talk to somebody about a piece of work you do not accept the work without agreeing a price for it - end of. You are not a charity....repeat as required.
And having agreed the price for the work you invoice your work. And if they fail to pay the invoice you send them a polite reminder. And then a more firm reminder. And then you call them. And then you send them a final reminder and take them to court.
Just remind yourself that you're trying to make a living. You would not turn up to any job knowing you won't get paid at the end of the month. You therefore will not do any freelance work in that knowledge either.
posted by koahiatamadl at 1:43 AM on May 26, 2011
I can heartily recommend a piece of software (and especially the methodology that goes with it!) called You Need A Budget. It's cross-platform, has an iPhone app with an Android one on the way and it is the sole reason that my wife and I were able to manage a transatlantic move for her, three years in London on mismatched incomes, a move for both of us to Scotland and now her preparing to go back to university. We would have been totally stuffed without it.
The software is incredible, because the principles that underlie it allow you to get to the point where you are operating on the previous month's pay, what they call a 'buffer'. So, in January, you spend December's income while January's income stays in your account, then you spend that in February while February's income sits in your account. Combined with a zero-based budget that doesn't easily allow overspending and tracking of what you are spending your money on makes for a very powerful tool to understand and take control of the way money enters and leaves your life.
They have great, very supportive forums, lots of tutorials (including regular live webinars) and the dude that runs the whole show does a whole series of welcome emails that ease you into using the software. I can't recommend it enough. It does require a lot of tracking of what you spend, but the peace of mind this has given me over the last four years can't be overestimated and it quickly becomes a habit - indeed, for me, that's what being 'financially adult' is - knowing where your money goes and making it do what you want it to do, rather than being helplessly buffeted by circumstance.
All of that said, the other posters are absolutely correct, your expenditures are out of whack with your income. Find a cheaper place to live, get slower internet or consider nixing it entirely in favour of library access, ditch your smartphones and get dumbphones with very basic plans (we're talking 15-20 EUR a month max, or even PAYG). You can't afford what you currently have on what you currently earn, if you have the goal of saving any money and establishing a sound financial base for yourself.
posted by Happy Dave at 2:01 AM on May 26, 2011 [1 favorite]
The software is incredible, because the principles that underlie it allow you to get to the point where you are operating on the previous month's pay, what they call a 'buffer'. So, in January, you spend December's income while January's income stays in your account, then you spend that in February while February's income sits in your account. Combined with a zero-based budget that doesn't easily allow overspending and tracking of what you are spending your money on makes for a very powerful tool to understand and take control of the way money enters and leaves your life.
They have great, very supportive forums, lots of tutorials (including regular live webinars) and the dude that runs the whole show does a whole series of welcome emails that ease you into using the software. I can't recommend it enough. It does require a lot of tracking of what you spend, but the peace of mind this has given me over the last four years can't be overestimated and it quickly becomes a habit - indeed, for me, that's what being 'financially adult' is - knowing where your money goes and making it do what you want it to do, rather than being helplessly buffeted by circumstance.
All of that said, the other posters are absolutely correct, your expenditures are out of whack with your income. Find a cheaper place to live, get slower internet or consider nixing it entirely in favour of library access, ditch your smartphones and get dumbphones with very basic plans (we're talking 15-20 EUR a month max, or even PAYG). You can't afford what you currently have on what you currently earn, if you have the goal of saving any money and establishing a sound financial base for yourself.
posted by Happy Dave at 2:01 AM on May 26, 2011 [1 favorite]
I recognise you from previous questions, but not enough to track your username. Could you please MeMail me? I definitely have some possibilities for you, but don't want to post them in-thread where it will give away a lot of the details I remember about you from the past.
posted by rubbish bin night at 2:31 AM on May 26, 2011
posted by rubbish bin night at 2:31 AM on May 26, 2011
In regards to your superannuation, rolling them all into one - even without researching too much about which one you put them all into - is likely to be better than leaving it where it is as you will only pay one set of management fees.
If you want to be methodical about it, have a look at Choosing a super fund (government site).
If you just want it done, look at which funds you have. Pick one that is an industry fund (e.g. HEST for hospitality workers, Unisuper for university staff), rather than a retail fund. Why? Because they are cheaper and generally do pretty well with returns.
Unless you have always worked in very corporate places, you probably have an industry fund amongst your selection. Go to their website, find a rollover form, fill it in with the details of the other fund, and send it to them. Some super funds will make you send a proof of identity (allegedly because of anti-terrorist legislation, because, sure, terrorists are putting aside money into superfunds that they can't pull out for years?!). In terms of selecting an investment option, many funds will stick you in a default one for your age, or otherwise a balanced one. Most investor-types say that in your younger years, you can afford to stick it in a higher growth plan. But just leave it for now if you can't cope with looking at it!
General financial resources - couple of MeFi member websites to have a look at - Get Rich Slowly, even though it is US based, has a lot of good advice on finances. When I got stuck into my finances, I found Pear Budget useful for finding where my money was really going.
I'd suggest making a list of things you need to do regarding your finances (based on the advice here and things you already know). Just tackle one piece at a time. E.g. this week, find a better mobile phone deal. Next week, gather all superannuation account numbers into the one place.
I'm sure you'll also bear in mind that some of the advice above from others is not Australian or European specific, e.g. high yield savings accounts in Australia return over 6% which is probably better than inflation in most places.
posted by AnnaRat at 4:51 AM on May 26, 2011
If you want to be methodical about it, have a look at Choosing a super fund (government site).
If you just want it done, look at which funds you have. Pick one that is an industry fund (e.g. HEST for hospitality workers, Unisuper for university staff), rather than a retail fund. Why? Because they are cheaper and generally do pretty well with returns.
Unless you have always worked in very corporate places, you probably have an industry fund amongst your selection. Go to their website, find a rollover form, fill it in with the details of the other fund, and send it to them. Some super funds will make you send a proof of identity (allegedly because of anti-terrorist legislation, because, sure, terrorists are putting aside money into superfunds that they can't pull out for years?!). In terms of selecting an investment option, many funds will stick you in a default one for your age, or otherwise a balanced one. Most investor-types say that in your younger years, you can afford to stick it in a higher growth plan. But just leave it for now if you can't cope with looking at it!
General financial resources - couple of MeFi member websites to have a look at - Get Rich Slowly, even though it is US based, has a lot of good advice on finances. When I got stuck into my finances, I found Pear Budget useful for finding where my money was really going.
I'd suggest making a list of things you need to do regarding your finances (based on the advice here and things you already know). Just tackle one piece at a time. E.g. this week, find a better mobile phone deal. Next week, gather all superannuation account numbers into the one place.
I'm sure you'll also bear in mind that some of the advice above from others is not Australian or European specific, e.g. high yield savings accounts in Australia return over 6% which is probably better than inflation in most places.
posted by AnnaRat at 4:51 AM on May 26, 2011
Mod note: This is a followup from the asker.
Thanks for the responses, everyone, they've been very helpful.posted by cortex (staff) at 6:47 AM on May 26, 2011
The housing question is a tricky one. We live in a very expensive metropolitan city with a large expat community. We're currently subletting from one of my partner's colleagues who's away on a long term sabbatical. We'll have to move at the beginning of next year. Our only cheaper option is to share a house with other people, a prospect I find highly distressing (I'm quite introverted and have had bad experiences with sharehouses before), but we will definitely scale down when we move.
My plan is to make more of an effort to scale back spending, and to track what we're spending. We wrote up a budget this week for the first time in... ever, so I feel like that's a start.
I am interested in learning more about investing, and what to do with our savings when we eventually build some. Would it be best to find a financial adviser? If so, how do I go about finding a good one?
I can't give you much advice regarding financial advisors, but a favorite self-help site of mine is from mefite, Get Rich Slowly. One of my favorite maxims from it is income - expenses = wealth. Often the expenses end of that equation is easier to adjust than the income end.
A tool to visualize my income and expenses has been huge for me; I use mint, but it looks like it won't work for you. Pay special attention to the categories of spending for a few months, and then build your budgets from there. Also, don't make your budgets too aspirational. If you blow through your budget every month, it's not doing its job.
posted by craven_morhead at 11:09 AM on May 26, 2011
A tool to visualize my income and expenses has been huge for me; I use mint, but it looks like it won't work for you. Pay special attention to the categories of spending for a few months, and then build your budgets from there. Also, don't make your budgets too aspirational. If you blow through your budget every month, it's not doing its job.
posted by craven_morhead at 11:09 AM on May 26, 2011
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posted by 2bucksplus at 4:41 PM on May 25, 2011 [1 favorite]