This week Kelly's Korner is talking about saving money.
I'm sure you've heard that money is one of the main things that married couples fight about and Newlyweds are no exception. So I wanted to give you a couple of my Newlywed money management tips.
Tip #1: Savings Account Management
I shared this savings tactic via a guest post on my favorite money-saving blog, Lean with Green.
My best "saving" tip is to divide your savings account into multiple sub-accounts.
That's right, break that one big savings account into several smaller sub-accounts for the key things you save money for. For example your sub-accounts could be: Emergency Fund, Home Improvement Account, Travel Account, and General Savings Account.
This can be done really easily through Bank of American or ING. Here is what our ING Savings Accounts look like:
What this is great is that is makes you realize how little money you actually have in savings once you divvy it up into those piles and can see it split that way.
For example, say you have $10,000 in general savings. That seems like a huge chunk of change. But once you break it into $5000 for emergency fund, $2000 for house fund, $2000 for Travel Fund, then you only have like $1000 of misc savings you realize that you should be saving more.
Now that we've divided up the accounts, we've set goals for each one to $x in Emergency, $x in Travel, etc.
Creating sub-accounts helps us realize our financial goals faster and it even makes saving a little more fun!
Tip #2: Budgeting and Tracking
Start tracking all of the money that goes out and all of the money that comes in - this will help you set a realistic budget. I track it all our income, spending, saving via a giant excel spreadsheet with formulas. I've been doing this since September 2009 and it's revolutionized our finances. Is it tough? Yes. Is it worth it? Yes.
Once you have 6 months to a year of financial spending data you can set a realistic budget and really manage against that. Don’t worry if you don’t do well the first few months; it can take a while to get adjusted to the budget.
One tracking tip I have is to use credit cards to track your spending, because they can easily show you exactly what you've spent money on where... but that brings me to tip #3...
Tip #3: Credit Card Management
Credit cards can provide a lot of benefits if you use them properly. We get hotel points, cash back, airline miles, and much much more as result of our credit cards. But they can come with hefty fees if you don't pay them on time or let them revolve. When we got married we suddenly had five credit cards and we were always getting confused as to which ones we had/had not paid. We had to argue with Chase and Amex a couple of times when we accidentally paid late.
So to avoid this I went online and figured out the date that all of our credit cards closed each month and the date they were due each month and put it an excel table in date order like this:
Also, we never let our credit cards revolve. The interest rates on credit cards are just ridiculous so we pay the full amount each month. Budgeting and tracking helps to make sure we don't spend beyond our means on a credit card.
Tip #4: Be a homebody sometimes
As lame as it is to admit, the Mr. and I try to get our entertainment at home.
We joined Netflix and get 2 movies at a time (unlimited monthly rentals) as well as Netflix on demand. Our monthly Netflix bill is less than seeing one movie in the Theater for two - so we rarely go to the Theater to see movies. So what if we have to wait a few more months to see new releases?
Reading is great source of in-home entertainment, so I joined Paperback Swap to share and swap books for free.
We try to eat at home and drink wine at home some weekend nights. You can get a $15 bottle of wine at Trader Joe's and see the same bottle of restaurant menu for $50.
When getting together with friends, love to have people over to BBQ and swim in our pool rather than always going out to eat.
(Entertaining at home a couple of weeks ago)
Are there any other Newlyweds out there that have tips from merging finances, creating a budget together, or just dealing with dollars in general? I'd love to hear your comments!
Mondays with Manny
3 days ago