Step 1) Make two lists. On the first list, write down everything you need. On the second list, write down everything you want. Differentiating between a need and a want is a crucial step in bulking up your financial avatar. Hint: Almost everything is a want. Here’s an example. Needs Toilet Paper Dog food Bread Wants The… Read More: A new way to shop »
Compound interest is a marvelous mathematical tool that’s either working for you or against you. Rich people stay rich and get richer by understanding the power of Compound Interest. Poor people stay poor and get poorer by an inability to use the power of compound interest. It all starts with your income and expenses. Rich Keep your expenses line… Read More: Compound Interest – A Powerful Friend or a Terrifying Enemy… »
I like simple. I have about three months of living expenses in a checking account and every bill is paid out of that account. My paychecks deposit a little more than half my average monthly expenses into that checking account twice a month. The rest is spent buying a Vanguard Index Fund, specifically VTSAX. Simple.… Read More: Thriftygal’s Money Strategy »
It is in Leif’s fortune (literally) that he makes a good income. If he takes a deep breath and dives in completely with my suggestions, he can free up his cash flow and knock out the debt in an astonishingly fast time frame. My job is to show him what’s possible. Here is a presentation I… Read More: Leif Week 4: What’s possible »
I have not invented or discovered any of the ideas behind basic personal finance. Everything I say will have been said by many different people at many different times, and probably – likely even – in a more eloquent way. The basic gems of money management are obvious common sense. And while I do think… Read More: You manage what you measure »
I went through six months of Leif’s finances (January 2013 – June 2013) and made some pretty charts in an attempt to diagnose the sickness in Leif’s financial avatar. I’ll start with the good news. Income. Leif makes a healthy income in a profession that is more recession-proof than most and as an independent contractor,… Read More: Leif Week 3: The diagnosis and fun with charts ! »
In the second week strength training Leif’s financial avatar, he told me he was planning a 2 week vacation. Oof, this was the equivalent of telling your personal trainer that you were gearing up for an amateur pie eating contest. Leif expressed concern about the timing as well and and floated the idea of shelving… Read More: Leif’s dilemma: Vacation »
This is the wall chart from Your Money or Your Life and my daily motivation. Here are my monthly expenses for the last few years. Here are my monthly incomes for the last few years. If you put them together, you can get a visual of the capital I used to first vanquish my student… Read More: My retirement plan in charts »
Leif’s Money Makeover Week 2 Note: Leif has no credit cards and all of his debt is from student loans. He uses his debit card for his purchasing. He is an independent contractor and has to pay his own taxes. Now that we know where your financial avatar is right now (your current net worth:… Read More: Leif Week 2: Where has your money gone? »
Leif’s Money Makeover Week 1 The first step is to see exactly where you are right now in terms of net worth. This means paying attention and owning up to your situation. The month to month change in your net worth is a good indicator of how healthy your finances are in a chart-able and… Read More: Leif Week 1: Know Your Worth »