Getting Started

 

Welcome to my blog! This is a pet project where I am hoping to be able to spread knowledge and improve people’s lives. Important stuff first. Why should you care and bookmark my site? *hint hint*. The content within these electronic doors will allow you to take control of your life without relying upon an expensive financial adviser. The goal of this blog is not to make you part of the FIRE movement (the Financial Independence Retire Early movement), it is to give you the tools to earn freedom. If that freedom means joining the legions of FIRE fans, or if it just means being able to go out once more a week because you’ve saved money in other places, that decision is entirely up to you.

Mr. Economic

“The first thing everyone recommends is ‘Make a budget!’. That’s not how I suggest getting started.”

So, where do you need to start?

The first thing everyone always recommends is “make a budget!”. That’s not how I would recommend getting started. My view on this is how are you supposed to know how much money to budget if you don’t know what your current spending habits are? I think the best and most realistic way to start taking control of your finances is to document your spending habits and then evaluate if those amounts could get cut back, then tracking your progress by seeing your spending decrease as you track. To do this, I always suggest starting by going to PERSONAL CAPITAL and signing up for a free account to have an easy way to track your spending (*when you first link your accounts, only the past 90 days is imported). As a bonus, if you sign up through my referral link you get $20! To start, follow the instructions and link all of your relevant accounts (add everything you can think of; savings accounts, credit cards, student loans, mortgages, etc.). Once all the accounts are synced, start browsing through the history of your transactions so you can clearly see where all of your hard earned money is actually going; large amounts may be spent in unexpected places. For example, your on-the-go $5 morning coffee sounds like such a small thing you don’t even need to consider it for saving money – except that turns into $1,820 if you have it every morning for a year. Now to me, that’s almost $2,000 that would be much better spent elsewhere.

“…start browsing through the history of your transactions so you can clearly see where all of your hard earned money is actually going.”

So once you have a good vision of where your money is going each month, and you have been able to pick out areas where you can minimize your spending, it’s time to figure out what to do with your new savings! This could be adding the new savings to a date night fund, travel budget, a savings account, or even investing that money into the stock market to turn into even more savings. Congratulations, you just successfully reclaimed your money! This does bring me to my last piece of advice for this post, however. Depending on your current financial allocations, take a look at both any “emergency fund” savings and any outstanding credit card debts you may have. Priority number one should be paying off those credit card debts (if you have them) with these newly claimed savings, because no matter what, its so important to eat away at credit card debt however you can. This is because credit card debt it usually at a very high interest rate, upward of 20%. This interest rate will destroy your finances over time. I will cover tips and tricks to escape from large amounts of credit card debt in a future article. Now, if you have already paid off your credit card debts or you didn’t have any to start with, your priority should turn to building an “emergency fund”. If you don’t have one already, I would highly recommend starting one, keeping in mind that the rule of thumb should be that this fund would represent the value of 3-6 months of your current spending habits. So now that you have studied your monthly expenses, make sure that you have 3-6 months worth saved in a savings account (I highly recommend a high-yield savings bank, such as Ally Bank – why not gain decent interest on your emergency fund?) as this money will become your rainy-day fund to help cover expenses if you ever find yourself in a situation where your income is unreliable. There are other options for this money, which can facilitate even greater returns than a high-yield savings account but I will cover those in later articles!

When you feel that you have mastered these beginning steps, it’s time to move on to other steps to help set yourself up in the future or find ways to maximize the money you have now. If you found this information helpful, be sure to read my next post (coming soon!) to learn more. I also highly encourage you to reach out to me (at my email on the contact page) with any questions or comments you have, as I would love to make this an interactive blogging experience. Thank you for reading, and good luck starting your journey to claiming control of your finances!

Mr. Economic

“If you are not on the same page, it will be much harder to make strides in the right direction as you will both be working in different directions as opposed to helping each other down the same path.”

 

The Talk

 

Having control of your finances is a great goal to strive for, and personally I believe the more you talk to others about finances the better off you can be; you get other viewpoints, opinions, and ideas when brainstorming with others than just trying to figure everything out all on your own. This is highly critical when considering your significant other, especially if you are blending/involved with each other’s finances. As important as I think it is to be open and to discuss financial matters, it’s important to remember that not everybody thinks this way. Many people are uncomfortable discussing their finances, and if you have a partner who is not used to or open to the idea of discussing finances, this is a hurdle that will have to be jumped. This is important to you and your financial goals because you and your partner have to be working towards the same goals if you want to be as successful as possible. If you are not on the same page, it will be much harder to make strides in the right direction as you will both be working in different directions as opposed to helping each other down the same path. A partnership should be built on open communication and trust, and how to handle your finances and future financial goals require both these traits.

This is something that Ms. EM and I had to work out when we decided to seriously think of our futures as combined and not just our independent goals. For some background, before getting together I was already interested in finances and knew I wanted to maximize my time spent working; I will be talking about my starting situation in a later article! Ms. EM on the other hand did not have any background with the technical details of finance and was saving money by keeping everything in a regular savings account. Now this isn’t a bad place to start, but there are more efficient ways to grow your money than just having it sit in a bank. Throughout the earlier stages of our relationship, we would talk about how to start getting more financially aware often. She opened a Roth IRA, drastically increased her 401k contributions, and opened a new credit card that gave more benefits than her previous bank offered. Through teaching her about the financial world, my own interest and skills grew, so we were able to grow together. This has resulted in both of us being very open and highly involved with all of our financials, with both of us being fully aware of our monetary standing at all times. Now, we are working together to achieve our common goal of financial independence.

Our personal experience turned into a gradual immersion to the financial world for Ms. EM, but it all started with one big opening conversation (“The Talk”) to introduce truly focusing on finances so we could start out together on the same page. This type of opening conversation must occur if you want your partner on board with your financial goals, but it has to be handled correctly regarding your partners’ current knowledge and involvement. There are three main categories your partner may fall under regarding their knowledge of the financial world: 1. Little to no knowledge, 2. Often incorrect or misguided knowledge, or 3. Moderate to high knowledge. The first step of “The Talk” is to figure out which category your partner is currently in, as this will dictate how you move forward. Conversation at this point will also help you gauge your partner’s openness to learning more or being vocal about your finances as a couple. You may find your partner is excited to discuss financial options with you, and simply has not known how to breach the topic (this is where Ms. EM fell in our personal relationship) in which case you can move straight into the deeper stages of “The Talk”. However, if you find that your partner is hesitant to discuss finances with you, the first critical step is finding out where their discomfort is coming from and then addressing that issue. Are they nervous about disclosing how much money they make or spend? Are they embarrassed about earning a different amount that you, more or less? Do they have other personal issues holding them back from opening up? Do they have any depts or other financial situations they have not mentioned to you before? Overcoming this barrier is key to starting your financial partnership together, but you have to be sure to let your partner move at their own pace so they do not feel attacked or pressured. Reassure them that you are simply trying to involve them with your own financial thoughts and goals, and that you want your future to include your combined decisions regarding money. The earlier you start working towards your goals, the easier they are to achieve, especially when there is more than one person involved.

“…you have to be sure to let your partner move at their own pace so they do not feel attacked or pressured. Reassure them that you are simply trying to involve them with your own financial thoughts and goals, and that you want your future to include your combined decisions regarding money.”

The next step of “The Talk” after ensuring your partner is open and ready to discuss finances is to make your long-term goals together. Where do you want to be in 5 years? 10 years? 20 years? What are your retirement goals? Once you decide on your broad goals, it’s time to fill in the gaps of how you can get to those goals; in other words, what do you need to start doing now to make sure you can achieve your future vision? At this point, the conversation should shift to what each of you have current knowledge in regarding finance. Most likely, you have not experienced the same things or been exposed to the same topics and learning from each other is a great way to build trust and understanding with your partner. This is also a great time to do research together, so you can both strengthen your understandings and you can also learn new aspects of finance together. Once you hit this point, congratulations, you have officially completed “The Talk” with your partner and you are so much closer to achieving your financial goals together for the future!

Learning about finance is always continuous; there is never a point where you have learned all there is to know. Being able to grow and learn together with your partner will help strengthen your base as a couple in more than just financial terms. All that’s left now is putting your knowledge and learning into action and making those steps together towards the future you want to have. I hope that this blog can be there to help as you continue to grow and meet your goals!

Getting Started

Welcome to my blog! This is a pet project where I am hoping to be able to spread knowledge and improve people’s lives. Important stuff first. Why should you care and bookmark my site? *hint hint*. The content within these electronic doors will allow you to take control of your life without relying upon an expensive financial adviser. The goal of this blog is not to make you part of the FIRE movement (the Financial Independence Retire Early movement), it is to give you the tools to earn freedom. If that freedom means joining the legions of FIRE fans, or if it just means being able to go out once more a week because you’ve saved money in other places, that decision is entirely up to you.

Mr. Economic

“The first thing everyone recommends is ‘Make a budget!’. That’s not how I suggest getting started.”

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Categories and Tags

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If you write about a variety of subjects, categories can help your readers find the posts that are most relevant to them. For instance, if you run a consulting business, you may want some of your posts to reflect work you’ve done with previous clients, while having other posts act as informational resources. In this particular case, you can set up 2 categories: one labeled Projects and another labeled Resources. You’d then place your posts in their respective categories.

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Pages vs. Posts

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If you’re new to WordPress you may be wondering what’s the big deal behind Pages and Posts. At first glance they appear to be one and the same: if you were to create either a new page or a new post you’d be presented with nearly identical interfaces and in many cases the public appearance of pages and posts will look the same.

Don’t let this fool you. There’s a very fundamental difference between the two and that difference is what makes CMSs, like WordPress, great platforms for integrating blogs with traditional websites.

Pages

Think about the kind of pages that make up a typical website. Most often you’ll see pages like “Home”, “About Us”, “Services”, “Contact Us”, etc. Within WordPress these are often treated as Pages; documents that have no particular regard for the time they were posted.

For example, when you visit the “About Us” page of your favorite company’s website you don’t expect the content to be very different from what was available there a week ago.

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