Personal Finance, a love affair that began upon me graduating from college and starting my first “real” job. I can’t quite remember the day/month/time of year it started, but I can remember spending hours reading personal finance blogs/researching retirement plans/reading personal finance books.
The ultimate goal was to eventually set myself up for success so that I could retire early and comfortably (not so much anymore, I’m a workaholic). My problem was that I didn’t know how to achieve that. It took me three years to finally get to a place where I felt comfortable with my plan. Ultimately the mistake I was making, was blindly following common opinion and not thinking for myself. I think that’s a common mistake that people fall into. Sometimes we get so caught up in technology and google, that we forget to think for ourselves. For example, when your following a GPS down a dead end road and there has been plenty of signs on the street saying that it was a dead end road, yet! That’s not what the GPS says. As a result, we found ourselves at the end of the dead end road and approximately 30 minutes off course. Why, you ask? That’s stupid, you say? Of, course it is! But, that doesn’t mean it doesn’t happen more often than not.
It’s time that we wake up and think for ourselves. In general of course, but in the terms of this post, I’m referring to personal finance. Constant years of striving to achieve financial stability and setting my goals in accordance to what I “should” be doing had in a tail spin. But, after finally thinking for myself I came up with my money plan. My money is mostly modeled after Money under 30’s “The 6 + 1 System For Financial Stability” (which I highly recommend, I also highly recommend the entire blog). Although my money plan is mostly modeled after Money under 30’s system, I also think you should do what is best for you. Only you really know what is best for you and your situation.
Here’s a few of the ways that I modified Money under 30’s system to work for me:
- For the buffer account, I feel that it is really dependent on how much you feel comfortable with. My opinion is that it can range any where from $250 and up. Although, at the bare minimum, I believe that you should have enough saved for your car insurance deductible. Just in case you get into a car accident (Car accidents seem to always happen when you’re pretty much broke. Hello holiday season!).
- I’ve consolidated a few of the categories to Invest/Save, so essentially for me it is inclusive of a Pre-Tax Retirement Fund (401k), an Emergency Fund/Retirement Fund (Roth), and Investing (Stocks, ETF’s, Business, etc.). I take approximately 15% of my income (because that’s all I can comfortably afford right now, with out starving that is) and split it evenly among my 401k, my Roth, and ETF’s. I do this so I’m not putting all of my eggs into one basket. My choices for investment may grow as time goes on, but I’m just a beginner.
- Last but not least, in my money plan, creating an additional stream of income is a solid portion of the plan. I think people should always aspire to having more than one stream of income.
These are just a few of the ways that I modified a personal finance resource that I encountered to work for me. Hopefully they will help you along the way also. Please comment if you have any additional insights!