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Mo' Money

I find money management a challenge. It wasn't anything that was really taught or was even discussed when I was growing up. Not that we were wealthy or didn't have to think about money; quite the opposite. We struggled and we were well-schooled in hiding the overdraft letter from my step-father if we got the mail first. Clearly, money management deficiency is a proud family tradition.

Over the years I've gotten myself into real financial pickles. These days the wisdom of college kids + credit cards is questioned but when I first went to college it was a credit card free-for-all and I blew it with the best of them. (For the love of Pete, why don't they teach basic finance in schools? I hear some people did have this in their high school curriculum but it should be standard for all high school students. Basic finance and basic car care.) Each time I've gotten myself into a mess I've learned a little more and gotten myself out of the mess. I've purchased homes so I do point myself in the right direction in general. But I still catch myself going down the stupid road.

Budget has become a big thing for me. Everyone who manages money successfully say the secret is a budget. It sounds too simple to actually work so I've been slow to the party. I guess believing the solution must be hard helps to rationalize the craptastic way I've managed my money in the past. If the solution is simple, then I'm just an idiot. I'm trying to put that realization off as long as possible.

I had an epiphany one day (shut up, we all have epiphanies that aren't exactly brilliant) that a person who has no idea what her disposable income is every week or month or even what her water bill generally runs, doesn't really know where her money is and is probably not being smart with what she has worked so hard to earn. In other words, I realized I was pissing my money away and I can't point my finger and laugh at any of those big stars who were rich one day and bankrupt the next because I'm no better at managing my money. I just have less to lose (and less resources to recover!).

When you first start earning money it always comes down to, "If I just made _____ amount of money..." and we work like crazy to get our first salaried position. Then we are always looking at the next salary bracket and thinking, "If I just made a little more, I would be able to do such and such." There was a point when I looked at my salary and realized I was living the same way I did when I was 19 and had an hourly job. I had bigger and more toys but I still lived from paycheck to paycheck and still bounced checks, missed bills, etc. There was no difference in how I managed my money. I have friends who make the same money I do but they have savings accounts (with money actually in them, I've found that just opening the account does not mean it will fill itself up) and can buy appliances, take overseas vacations, give to charities, etc. I was feeling good if collection agencies weren't calling me at the moment.

So I reluctantly made a pathetic stab at the budget. It was more like recording what my bills were for each "category" every month but even that was a revelation as I saw the dining out category loom over everything else. For someone who rarely eats out, how could that category suck up so much of the paycheck? It turns out that grabbing something at the deli on the way home or ordering Chinese food counts as dining out even though I'm doing loads of laundry between bites. This was my first indication that some spending can get really out of control when I'm not looking. (Shut up again, this doesn't come naturally, OK?)

Another lesson I've learned is that banks are not your friend and are not there to do anything that actually benefits you. Regardless of what they tell you or advertise. I cannot begin to list all the ways banks have screwed me and done things that seemed shady and even on the side of wrong. I can only say I was not at all surprised when the Federal government recently shook their finger at the banks' methods. They didn't actually do anything to stop them or protect the consumer but at least I had some validation. This was also when I admitted to myself that even though I signed up for notification emails from my accounts when they got below a certain point, my banks would much rather have the overdraft fee. I never get emails from my banks when my account drops below a certain level or the "email" they send you is internal to the site so I can't get it unless I sign into my account. But duh! If I sign into my account to get "alerts" then I'm already seeing what the balance is. Useless.

It was this small feature that led me to Mint.com. Disclaimer: This isn't a plug for this company, I'm just sharing what seems to be working for me at the moment and I still never trust any organization that has anything to do with my money. Mint isn't a bank where you put any money but you do have to grant them access to your accounts so they can "see" what is going on in there. I'm not crazy about this and I warn everyone I tell about Mint that they will have to give them highly sensitive data. This is really dangerous because even if they have amazing online security there is the human element that every organization has and there is no telling who the next doofus is who leaves a laptop in their car to be stolen or does the stealing themselves from the company. So users beware, in a perfect world, I would not have given this information to anyone.

That being said, Mint.com is a site that monitors your spending and funds and gives you a heads up when something is going down that stupid road again. It will actually email me when my account gets below a certain level. An actual email...in a timely fashion...in my email inbox. Amazeballs.

But the other feature Mint has that I'm loving is their budget tool. They have a default "budget" that they will apply if you don't set your own budget amounts and they give you a visual of how close or far you are from your monthly budget amounts. This was really helpful for me because I didn't know where to start. I know what I'm spending monthly on groceries but should I be spending that much? Should I be spending less? What is the average? You can go in and change those amounts as needed and adjust the categories. You also tell them what category an expense may be (for example, the charges to the cafeteria at work should go into "dining out.") so every charge coming through your account is getting applied correctly to the budget. I've gone in and refined the budget so it reflects what I believe my monthly expenses should be (gotta add the pet food expense!) and with my phone app, I can see at any time how close or far I am from budget. If I go over budget in any category I get an email. I love it.

This really has helped me understand where my money is going and where I need to make changes. But it has also become a bit of a game. Can I stay on budget in every category this month? Games are great but apparently I cheat. I recently had a hefty veterinary bill and I found myself giving the vet a different card the other day so it wouldn't show up on my Mint budget and make me over in that category for the month! I'm cheating on my budget. I'm cheating on myself!

Proof that no matter how well-paved someone makes the road to fiscal responsibility, some of will still say, "Stupid road, here I come..."

Comments

Much of what you said about your history with finances could be said of myself (and my husband) as well. We, too, are on the road to responsibility with the occasional detour. And, we too, have found Mint to be an incredible tool. One warning, however, is that when we were banking at Chase Mint's numbers were sometimes a day or two behind what Chase posted on their site. Not a huge deal for budgeting, but it can get you into trouble if you are checking with Mint to see if you have enough $$$ to make a purchase. It's possible that there are transactions that haven't posted yet.

Good luck with your on-going mission. It may be simple, but that doesn't mean it isn't hard.