Quote:
Originally Posted by Vegas69
I don't know if it's been covered but I thought I'd post it either way.
Taking stock in your personal finances is key to investing. Where is the money going? I've had a spreadsheet with hard costs for quite some time but recently I broke it down and spend every penny before it comes through the door. The hardest part is the discretionary spending. Look at your bank statements over the last 6 months and it will make you sick. Allocate a specific monthly budget for misc. and blow money AFTER your hard cost including future expenditures like car maintenance, car replacement, home maintenance, etc.. I'm able to track my approximate monthly net worth gain from savings, retirement contributions, and principal reductions. This is a great way to keep yourself accountable and really dissect your finances. It's also a great way to lay out a path to financial freedom. You'll now know how much discretionary income you have left over. I'm increasing my retirement contributions and mortgage principal reductions with some of the excess. I'm commission so I use the average over a 6 month or 12 month period for my income. I've also combined Kelli and I's numbers so it's a WE deal.
Bottom line, a major key to investing is additional money to allocate to that avenue. Until you get a real grasp on your expenditures, you aren't maximizing your investments. I don't care if you have three nickels to rub together or if you are filthy rich. It's just as important.
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Todd,
I always enjoy reading your posts, either here or in the Health threads. Always inspirational.
This year my life somewhat settled down for me. I have always been really good with money and finances and never in debt. Between school, a period between school and finding a job, getting married, moving, buying a house and a few other expenses, I had acquired more debt than I ever thought I would have. Again, I've always been smart financially, so my goal was always to pay off all my debt. This year things finally settled down for me and I was able to start knocking things off. I took the Dave Ramsey Total Money Makeover approach and knocked them off a list, smallest to largest. I'm over halfway through and it feels amazing. Luckily my wife is on the exact same track as myself. Every single day she goes over the finances, looks at where money is coming in and where its going out. This sucks for my car habit, but I don't complain. Its nice to see my debt going down and my play money going up. My goal is to be 100% debt free, my house and everything. I know that's a few years off, but I still don't see any reason I can't make that happen over the next 15 years instead of 30.