Money management questions

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Hey parents, I am back. since you did so good on my executive functioning questions, I have another gnarly problem that maybe ya;ll can help me solve.

I suck at money managment. I was never taught much beyond how to spend it.
I know nothing about investing, saving, or anything about how to make my money go farther. I dont even know how to draw up a budget.
However, I notice the same thing happens every month...at the end of the month, I am broke....running on finacial fumes till the next check. I worry about emergencies and other unplanned events that are costly.
I have 2 credit cards, well one of them is a medical credit card I use for buying hearing aids and vet bills, the other one, we try to keep money on it for emergencies and we pay well over the min. payment so we can use it if we need it.
I have learned to be careful of credit card spending after a screw up that cost me.
We have alot of bills though and we are trying to eat healthy which is actually the biggest part of our out going money that I can guess.

But beyond month to month survival, I know nothing about managing money. Nobody ever taught me. Mom never learned either.

Any ideas on money mangagment that is for people who nothing about it who are living check to check?

I read rich dad, poor dad, but I could not really understand it. All I got out of that was invest in comercial property on corner lots...like that does me any good.

I do know that the rental market is great right now due to all the foreclosures, but again, I cant afford to own a house for me to live in much less someone else.



Jojo

A good step 1 is to see where exactly your money has been going. Many banks can transfer your data into programs like Quicken, or you can create your own spreadsheet with categories that are meaningful to you.

In the way back when I had less money and tracked things that way, it really helped me make wise choices. Because I got lazy as we got better cash flow, and stopped tracking, we actually have surprisingly little to show for the net gains in income. I regret letting that slide. Tracking is definitely step one.

Another smart thing to do is only use credit cards if you know you can pay it off IN FULL at the end of the month. The only exception should be true emergencies. Once you start paying interest, you are always paying interest, and credit card interest is expensive interest. I refuse to ever pay it, but I do like getting to float my money for a month, while the float is free.

I also refuse to pay annual fees for credit cards, bank accounts, etc. I'll take less bells and whistles in order to stay fee free.

And I've got to run. But the above is a start.

Last edited by DW_a_mom on 30 Oct 2011, 11:56 pm, edited 1 time in total.

Thanks for replying DWmom,
Unlike most auties, I am not computer savvy to say the least. I can use the basic internet, word processing, the paint program and the computer cam and that is about it. I am very creative and most of my brain power goes that direction. I think I should have been born 100 years ago. I can make a broom, can preserves, spin fiber on a wheel, paint most anything (exept a plastic bag.. it is a lot harder than it looks) and weave baskets and use a loom, and but have never used facebook, twitter, downloaded music, have any idea how to get a picture under my user name.
So I am going to ask a dumb question for most of those on the spectrum, What is a spreadsheet? how do you use it? and what is quicken and how do you use that too?



Jojo

This is a spread sheet:

http://en.wikipedia.org/wiki/Spreadsheet


I don't know much about it either because I have never used one.


Never use credit cards.
Never spend your money on fun stuff, always save it for your bills and then see what you have left over at the end of the month after you have paid all your bills, that includes gas and groceries.

usually at the end of the month after bills gas an groceries, fun stuff excluded, there is not much.
I have to include fun stuff, some, because my special interests involve art supplies which cost money. I have found that I can find some art supplies much cheaper at hardware stores...they do a real mark-up on them in craft stores.
I cant live very well without art. Art is my healer.

thanks leaguegirl for the link on wkipedia...I will check it out.

Jojo, I am terrible at planning things, but (fortunately) I have never had any serious financial problems. I think this is because of the following.
First and foremost, my default setting is not to purchase things. I think long and hard before buying things, especially expensive things. This is bad because it means I procrastinate and I am often indecisive, but it keeps my costs down.
Second, to some extent I compensate for my executive dysfunction by relying on habit and routine. There is very little variety in my diet, so I buy more or less the same (inexpensive) things when I go to the supermarket. I hardly ever go out, travel, etc., which helps to keep my costs down. (Yes, it is boring, and sometimes it really bothers me.)
Third, like others have already suggested, I use a spreadsheet to keep track of my finances. When I started doing this years ago, I set up a very simple spreadsheet. In the first column was the date (from the 1st of January to the 31st of December). I would enter the total amount of money I spent in a given day in the second column. In the third column I had the spreadsheet programme compute a cumulative total of the daily expenses from the previous column. In the forth column I entered any income I received, which was usually just my pay cheque at the end of each month. In the fifth column I had the programme compute my cumulative income. Finally, the sixth column computed the cumulative balance (i.e. the difference between the cumulative income and cumulative expenses). The goal is to keep the numbers in this last column positive. I have since modified this spreadsheet by separating fixed expenses (i.e. rent and utilities) from other expenses, and by computing various weekly and monthly totals, but the set up is still fairly simple.

Libre Office < http://www.libreoffice.org/ > (also see http://en.wikipedia.org/wiki/Libre_Office ) is available for free and includes a spreadsheet program. It contains built in help facilities, and you may be able to find further instructions and tutorials on the web. (If you get really stuck, send me your e-mail address via PM and I will set up and send you a basic spreadsheet for you to try.)

Now, if only the rest of my life was this organised.

It's funny, I am so used to using spreadsheets at work,at home, with the PTA, and so on that I don't think of it as a "computer savvy" thing, but I guess it might be an "office skill" thing, because I've run into a few people recently who had never learned to use one. Definitely worth getting a freeware version and learning how to use, though, because it is very commonly used tool.

Quicken is a popular personal financial software program, but not worth buying if you don't have other reasons to own it, in my opinion.

I use an website: mint.com

If you put in your account information, it pulls together all of your transactions from all accounts and then lets you categorize them, gives you the necessary information on how you can save money. It is the easiest I have used, and it's free.

I like spreadsheets, so at the end of the year, i download all of my transactions into a spreadsheet to assist me in tax prep. If you don't have a big tax process, you could completely skip that part.

I use credit cards to track my purchases and then pay off at the end of the month. I don't use credit cards to carry a balance. If you do, it is recommended that you shop for the lowest interest rate cards, as the higher rate cards are horrendous.

You can find lower rate cards on bankrate.com.

Seconded. If you follow the directions carefully when you sign up, much of it will be done for you - if you can get on the internet and follow instructions, that's as much computer-savvy as you need. Make sure you put in EVERY account you have, including all those weird store credit-cards, or cards you got for a one-time purchase and paid off - it will help you make sure nobody's spending your money for you without you knowing.

We also have asked our bank to automatically debit money from each paycheck into a credit union account; you can have them do this into another checking account (make sure you know the rules, and there aren't weird fees) or into a savings account (keep in mind a savings account will limit the number of withdrawals you can make per month.) Ask your bank to help you set this up.

We divide our expenses into two categories: monthly (and after a few months, Mint.com will give you a good idea of what those amounts really are) and intermittent.

So, monthly expenses would be stuff like utility bills, groceries, credit cards, housing, etc. First of all, make sure you have an accurate picture of these expenses, as they tend to change over the course of the year. Having an online system to track your spending will help you, but keep in mind that, for instance, your electric bill will be completely different in summer than in winter. This is where you can figure out how to cut back, too.

Intermittent expenses are things like insurance (if you pay quarterly,) taxes, car license tag fees, doctor bills (depending on your insurance,) car repairs - all of those "surprises" that happen every so often, that throw you off. It helps to have somewhere to sock away money just for this stuff.

Once you have those two things under control, it's a good idea to open yet another account to start saving. Mint.com has targets and planning for this.

I would first of all check your two credit card statements to see what you have been spending your money on and if there are any services that can be cut or downgraded. (A gym membership you don't use, premium cable channels, etc., online subscriptions you don't use anymore, etc.)

Also, are you living in a place that is too expensive? Before your lease is up, you might look for a more affordable place or ask for the rent to be lowered before you sign a new lease.

Adjust your thermostat before you leave for the day. Pets will be okay if the temp in your apartment is 80 during the summer and 60 during the winter.

Before making major purchases, shop around on the net or call around in order to find the best deal, and use coupons. Many company websites have coupons on them.

Avoid going into overpriced stores and going to places where you will be exposed to high-pressure sales tactics.

Do not buy furniture, TVs, or computers on credit--look for a cheaper model or buy something used. Check out craigslist.org for furniture, Half Priced Books, ebay.com, amazon.com, garage sales, and Goodwill.

If a salesman is pressuring you to buy something, insist upon going home to think the matter over.

Managing money can be difficult. Good luck!