Rental Property Investor · Charlotte, NC · Member since 2016 · 36 posts · 10 votes
Hey everyone,
I am graduating college in a week or so, and want to be prepared to budget effectively as I start getting real income for the first time. I'm curious as to how you manage your money, any apps you use for tracking spending etc, and any tips or tricks.
Rental Property Investor · Sour Lake, TX · Member since 2018 · 38 posts · 76 votes
7y
@Eric Fitzgerald congratulations on graduating! I have used mint.com for 10 years and really like it. You can track and itemize all your purchases, net worth, net income etc to help you identify how to optimize and set goals.
My biggest piece of advice is however poor you've been living in college... Roommates, cooking at home, driving a beater, keep doing that for as long as possible. At least until you get married.
You can use your debit card for all your purchases and at the end of the money go through them along with your receipts. Another option is to pay cash and write down your spending. Paying cash will limit your spending.
Rental Property Investor · Sour Lake, TX · Member since 2018 · 38 posts · 76 votes
7y
@Eric Fitzgerald congratulations on graduating! I have used mint.com for 10 years and really like it. You can track and itemize all your purchases, net worth, net income etc to help you identify how to optimize and set goals.
My biggest piece of advice is however poor you've been living in college... Roommates, cooking at home, driving a beater, keep doing that for as long as possible. At least until you get married.
This hasn't been easy for us, but we had years of bad money habits to work through. If I were you I would start going through the entire line of the Bigger Pockets Money podcasts.
I second @Lindsay Brake's recommendation to read Set for Life by Scott Trench. The book was written for people in your position.
I grew up in a hopelessly broke family. My wife did not. She's really helped me see how it affected me, how I have this huge black hole in me that's simply never going to be satisfied until I have more and show that I have more than anyone else I have any social contact with, and probably not even then. Something endlessly hungers inside of me for visible displays of social status through wealth, no matter how much I try to fight it, no matter how clearly I consciously understand and accept that it's an irrational neurosis. The best I can do is stay a bit ahead of it.
If you have any of the the same hangups, start fighting them now. They're the psychological mechanisms of shame that will keep you broke more effectively than any others.
Investor · The Creek, WV · Member since 2014 · 890 posts · 1k+ votes
7y
Keep living on the same budget as you are now for as long as possible. You are already used to it. Save that money/pay down any bad debt you can. This is the best thing my wife and I did when we graduated college and before having kids.
I am graduating college in a week or so, and want to be prepared to budget effectively as I start getting real income for the first time. I'm curious as to how you manage your money, any apps you use for tracking spending etc, and any tips or tricks.
Thanks in advance
Eric
Dave Ramsey's Every Dollar app and don't go into car or credit card debt!
Congrats man! I have also used mint in the past but now don't use it. If you don't already, you can use a credit card with cash back for all purchases and pay off in full every month. I have done this for a while instead of a debit card.
Also, if you can buy a used car or have a used car and can pay cash for... it helps long term as you won't be paying monthly payments
Investor · Plainfield, CT · Member since 2017 · 18 posts · 20 votes
7y
I have been using Stessa. It’s free and you can take photos of your receipts and categorize your deductible expenses. It’s not necessarily for budgeting but it’s great come tax time when everything is in one place. My mother in law has been using it for her side business - ( which is not real estates related) she works alot of events and has tax deductible travel expenses for conference. It’s great when your busy and alway on the go.
Investor · Jonesboro, AR · Member since 2017 · 136 posts · 79 votes
7y
@Eric Fitzgerald
I draft my account monthly for my Ira.
I can retire but I want to retire a little comfortable. Set up your Ira or whatever you choose fast. You have time on your side. I use vanguard index funds.
Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
7y
@Eric Fitzgerald I highly recommend taking Dave Ramsey’s Financial Peace University class offered all over the US. It’s a great foundational class for money management and financial planning.
Keep living on the same budget as you are now for as long as possible. You are already used to it. Save that money/pay down any bad debt you can. This is the best thing my wife and I did when we graduated college and before having kids.
Great advice Derrick. When you are in your 20s people expect you to be poor and have no money. There is no need to buy anything expensive. This is a big mistake made by 20 something once the money comes in they think they need to begin showing it off.
1. Increase your income every year should be the primary focus.
2. Save 25%+ of your net. (The increase in yearly income should automatically be added to savings 100%)
Real Estate Agent · Salt Lake City, UT · Member since 2014 · 473 posts · 230 votes
7y
@Eric Fitzgerald
If you haven’t already, read up on mr money mustache. Especially the article on the shockingly simple math to retire early. That article changed my life!
Burnaby, BC · Member since 2017 · 282 posts · 268 votes
7y
Great question Eric. The fact that you're even thinking about it is ahead of most people. For me, I've always liked to save and had good impulse control so never had to resort to apps but I'm sure a quick google search can bring up some good ones.
By focusing on the end goal I think you have in mind (Accumulating wealth), I would give the following recommendations:
1) Get onto a career track with good earning potential. The more you make, the more you can save and it becomes a snowball effect.
2) If you can put aside 10% of every pay cheque into an investment like an ETF, it will grow surprisingly over the years thanks to compound interest. The earlier you can start saving and investing, the richer you will be.
3) Use credit cards with no annual fees and cash back (annual fees are ok if the numbers make sense), and make sure you pay off the balance to avoid higher interest fees
4) For big ticket items like 50" TVs, cars, etc. Look and wait for good deals. Black friday usually will save you a ton compared to any other sale that year.
5) Keep investing in yourself and educating yourself. You are the best investment that you can ever make.
Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
7y
I gave my kids a copy of the Latte Effect by Bach. I enjoyed the stark reality & exposure of the small stealth expenses that drip like water to erode your financial wellbeing during the decades of a mind numbing 9-5 JOB. Many of those I worked with would say 'where did it all go' as they neared retirement & yet they always had the lease vehicle(s) (some 2 or 3 in the family), the various club memberships, 2 pack a day cigarettes & those nights at the bars that they cannot remember etc etc.
I just wish I still had the $$$ I spent on beer during my 20-30's but at least I got into REI at a very early age.
If you're looking at how to save money, the tip on living like a student (minus the drinking and partying) and being frugal is a good one. Don't focus on what others are buying like a fancy new car. Avoid credit card debt, always pay them off in full and don't pay for things you don't have to (you can get plenty of free credit cards, buy a good, used car). Save for things like vacations before you take them. You don't miss what you never had. Maxing out retirement savings options is also good, especially if your employer matches your contribution.
One thing a friend of mine does with their kids, is when they want to buy something or ask for something, they ask the kids how many hours would you have to work to pay for it. It puts it into perspective (especially if you do your net hourly wage).
San Antonio · Member since 2019 · 3 posts · 3 votes
7y
Hello Eric,
I am new to the Investing world and I just wanted to say you are being a lot smarter than most when it comes to thinking of building wealth. The one thing I would say that is actionable to start would be to track your spending. I would not worry about long term planning or anything like that. I find the one thing that kind of blocks me from doing anything is overthinking it. If you start by tracking your spending for a week. You will know about how much you need to live on. From there you can track how much you spend in a month, year, etc.
After you know how much you spend you then have to start on the long term tracking. This will give you a foundation to work off. What are your long term goals? Where do you see yourself over the next 2,5,10 years? There are lots of books at this topic that can help give you a better foundation than what I just said. However I believe in small steps. Dave Ramsey has a lot of books on Finance and just life in General. Robert Kiyosaki's Book Rich dad poor dad is good as well. Remember life is a marathon not a race.
Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
7y
Do the opposite from everybody else! Live well below your means.
Shop the outer edge of the grocery store. Eggs, Milk, Bologna, Bread, Veggies, butter.. If you feel risky, and want to venture to the center, go for the rice and pasta, but stay away from the junk food... Your wallet and your belly will thank you later.
I am graduating college in a week or so, and want to be prepared to budget effectively as I start getting real income for the first time. I'm curious as to how you manage your money, any apps you use for tracking spending etc, and any tips or tricks.
Thanks in advance
Eric
Dave Ramsey's Every Dollar app and don't go into car or credit card debt!
We also use the Every Dollar app. Just the simple act of tracking your spending reduces your spending. So although we could spend more money than we do, we see no reason to waste money.
Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
7y
@Eric Fitzgerald you have received a lot of great info and advice here. Right now you are at an exciting time and I agree with what @James Ma stated that the fact that you are thinking about managing your money puts you ahead of most people. I don’t know what spending habits you have developed already in college but you can begin this new journey by starting to develop good habits at the beginning of this new chapter in your life.
@Lindsay Brake mentioned Scott Trench’s book Set for Life. I think that @Scott Trench and @Mindy Jensen have a great podcast that @Jim K. mentioned called the BiggerPockets Money Podcast that I recommend to tons of people who want to learn how to manage their money better. I was recently listening to episode 51 where Scott states:
“In order to move towards financial freedom, you need to use leverage in 1 of 4 areas:
You have to earn a lot,
You have to spend very little,
You have to Invest aggressively,
Or you have to create assets.”
He said that you have to use leverage in 1 of the 4. You don’t have to be perfect in all of them in order to become wealthy. I agree with what he stated.
@Derrick E. and @Frank Wong both mentioned income creep which is where, as your income goes up, your standard of living creeps up right along with it. In fact in the U.S. it usually creeps up just above it - keeping us locked into the financial matrix (which is where we appear to be doing well financially but in reality we are not; but neither is anyone else around us so we think we are doing just fine). It is hard to fight against income creep unless you have specific benchmarks that keep your spending habits subject to those benchmarks. For example, setting limits on yourself like I can get the car I want when I can buy it with cash. Or, I can get a mortgage on a home only twice the amount I make a year. What that does is it creates hunger inside of you to work hard for the things you want rather than steals the hunger by giving you the reward (what you want) upfront through financing rather than through your discipline and sacrifice.
@Brian G. in a post years ago mentioned reading the book The Richest Man in Babylon. I couldn’t agree with him more on that. That book, in my opinion is the foundation of financial management books. The first step it teaches is to pay yourself first and not to let it be less than 10% of what you make. That, in my opinion, is the first principle of finances and everything else builds upon that. If you don’t or can’t live by that first principle than the chances of you ever becoming wealthy are low, because wealthy people spend less than what they earn. Broke people do the opposite.
Brian Gerlach and @Steve Vaughan both mentioned Dave Ramsey. I think reading is material is a good start when it comes to beginning to learn about managing your money and getting out of debt. Dave Ramsey is great when it comes to the defense of money. However, he is not very good, in my opinion, when it comes to the offense of money.
The financial program that I follow is called Financial Fitness: the Offense, the Defense, and the Playing Field of Personal Finance by Chris Brady and Orrin Woodward. There is a huge emphasis in the book on the investment that you make in yourself to increase your earning potential through personal and professional development and financial literacy. It goes through the hierarchy of investing with the investment that you make in yourself being the base of the hierarchy. I have liked the content so much that I have started teaching classes on it out of my office in Mesa, Arizona. The company that produces the content also has an app for tracking expenses like some apps mentioned earlier.
Anyway, I hope that you take the advice that has been given in this thread to help you start out on this new financial stage of your life. Good luck.
Rental Property Investor · Sour Lake, TX · Member since 2018 · 38 posts · 76 votes
7y
I agree with everything @Shiloh Lundahl said in his post, thanks for taking the time! On the topic of great reading material and lifestyle creep I want to mention Millionaire Next Door by Thomas J. Stanley and William D. Danko. This really highlighted for me how appearing rich and having a high net worth are not the same concept or the same people. It helps to have this foundational knowledge when you see a really cool car drive by.
I personally use a credit card to track my spending. I use my checking account for all the major bills such as phone, rent, utilities, etc. My credit card has a limit of $1100, so that’s how much I have to spend every month. When I get my end of month check, I pay off the entire card and start new. I found that $1100 might not be enough for my area, so I might bump it up to 1300. Whatever money is left in my checking is applied towards saving. Main goal is to get at least 5k in my checking before I start dumping the rest into savings.
I also use Daily Budget, an app to track what I am spending my money on.
New to Real Estate · Middleboro, MA · Member since 2018 · 56 posts · 27 votes
7y
I've used mint for tracking spending and personal capital for tracking net worth and both were good but I just prefer to use Google docs now. I have 3 spreadsheets, one for expenses, one for income/savings rate, and one for net worth.
Simply tracking spending has been one of the best things for me, it's kept me from lifestyle inflation and made clear my biggest expenses. Once i had that data i was able to develop a plan on cutting expenses. For example last year my two biggest expenses were student loans and vacation. I refinanced my loans and created an automated system to pay then down. I then started travel hacking and drastically reduced vacation expenses.
ChooseFI has been a great resource for me when it comes to personal finance. I think they have spreadsheet templates you can download and use from their vault for tracking expenses
Congrats and Goodluck. I also recommend Set For Life by Scott Trench
@Eric Fitzgerald hey Eric, I would recommend using this App called Mint. It will help you keeping track of your daily expenses. You can also set a monthly budget based on your income. I would also recommend you to save as much as you can or at least 30-40% of your income. Save it until you know what you’re going to do with that money. Good luck!