Don’t be too hard on yourself, I swear “Blue Sky” has to be one of the most-used company names globally - recently went on holiday in the Med, and there was a “Blue Sky” hotel, a “Blue Sky” sticker on a microwave, “Blue Sky Parasailing” boats…
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28 posts were split to a new topic: Cryptocurrency Discussion Thread
Happy Tuesday! Nothing too detailed this week, but what does everyone think about budgeting? Do you budget? If so, how did you determine your categories? How rigid are you with your budget?
If you don’t budget, why not? Is it too much work to track? Not sure where to start? Yolo?
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I budget but I am not terribly disciplined about it these days. I am fortunate enough to have a good chunk of margin and I’d just rather not stress so much about it. However if you don’t have margin and/or have a big serious goal you’re pursuing it’s essential, even if you just do it all in your head.
Also I’d say everyone should learn how to do it and do it rigorously at least for a little while. You need to understand how your finances work well enough to not “die on the Walmart floor” and if you can learn to budget you will be most of the way there.
Categories seem pretty straightforward to me, never thought about it much. Giving, housing, utilities (split up into each bill), food (split into grocery and eating out), transportation (split into gas & maintenance and insurance), and then a few discretionary categories.
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My wife and I do all of our saving with payroll deductions (401k, HSA, etc). All remaining money goes to mortgage, utilities, bills. We buy everything on 1 credit card and pay in full every month. Any leftover money goes to a brokerage account. But if we spend it all, no big deal, because we saved what we need upfront.
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We have a structured budget. We use YNAB and it’s the best money we spend all year. At the end of the year we discuss what our big ticket items for the year ahead will be and set savings goals for them (distributed across the year) as well as set savings needs for regular and semi regular expenses, bills, charitable giving, gifts, etc. There are currently 110 line items. Then the day before our biweekly paychecks, we sit down and go down the list
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We use Monarch for our budgeting app (RIP Mint), but we only use it to track projected spending vs actuals. We track our budget weekly
We basically zero dollar our budget. We both max 401k contributions and HSA, monthly transfer to our AMEX high yield savings, then project our budget. Anything left over will be moved to our more semi-liquid Charles Schwab brokerage account
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I’m happy to have e4 as a place people can discuss many things including crypto, but it seems like the fine details and speculation (while related to personal finance) obscures from the purpose of the thread. So feel free to carry the discussion on here Cryptocurrency Discussion Thread
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It’s beautiful
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I take a very high level approach to my budget. It essentially consists of keeping a certain amount of cash reserves on hand at all times, carrying zero debt & maxing out my 401k contributions.
After those obligations are met and all of my expenses for the month are paid for (taxes, utilities, insurance etc.) I then apply a minimum of 50% of the money left over to the cash reserve and use the remaining balance for whatever I want.
The ending balance of the cash reserve each year becomes the minimum target balance for the next year. Rinse and repeat.
I’ve found this approach works much better for me than “micro managing” each category of my budget.
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This will probably be the last one of these for the year, but as we approach the end of the year, thought it would be a good time to broach the topic of net worth.
At it’s simplest, net worth is your assets minus your liability/debts. You add up any savings, stocks, home value, pokemon(?), etc to calculate your assets. You then subtract things like credit card debt, student loans, mortgage, or other debts to leave you with your net worth.
This is something I like to calculate at the end of each year to see if I’m progressing as well as I’d like to. It can be a helpful data point in retirement planning, assessing financial health, or tracking things as you pay down debts.
Is this something others do? If so, how often do you track it?
If not, what’s holding you back from it?
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Wow the number is bigger this year! Even comes with a dash added in front of it! Thats a fun (or scary if youre me) exercise to try out.
This topic has been so helpful in making me realize how magikarped i am in finances. Hows that saying go: First step is defining the problem, next step is fixing the problem, last step is evolving the problem into gyarados and taking out your enemies with a hyper beam. Currently step 1 but maybe next year i’ll be on step 2.
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I appreciate not being alone
I pay attention to it. My situation is simple enough that I can calculate it in my head so I just think about it from time to time and keep on eye on the numbers that impact it most (home equity, 401k balance).
It’s a very important figure to keep an eye on. It needs to be steadily growing at an adequate rate if you ever want to achieve financial independence. People really ought to think about it the way they think about their income- it’s the true measure of your wealth.
Also, people that make average money and buy a new car every 2-3 years would do very well to track this. That is one of the biggest net worth killers.
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I use ynab, so there’s an estimator built in. I check it a few times a year. It’s nice to be able to see progress. When there are big jumps or big drops, it’s also nice to reflect on why that would have been. It’s good motivation to keep making progress since I’m in the accumulation phase
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I pretty much always know what it is. I regularly update my spreadsheets ™ when I get paid.
I’ve got everything mapped out for the next 20yrs and I know on a monthly basis if my NW is growing at the rate it should for my goals, so if I dip one month I can top up the next to remain on target.
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I track our networth quarterly.
I only track liquid networth and our house vs our mortgage and car notes (our only debt). We are lucky to have a 3% mortgage and two, 0% car loans.
We replaced two 12 year old vehicles with two new cars earlier this year. We got 7% off one and 10% off the other, no add ons, and 0% loan. Thanks Mazda. We will keep these for just as long.
I do not include intangibles or items that require effort to value like pokemon, jewlery, other property that in theory could be liquidated, etc.
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We are going to do it for the first time at 12/31/24. We don’t own a home, so it is just cash + retirement + Pokémon. Maybe I’ll add our two vehicles but they aren’t worth more than $10,000 combined.
I think talking specifics with money is a sort of thing to be avoided but this was the year the sum of all retirement accounts really benefitted from compounding growth. It’s quite nice to make wealth without doing anything.
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I also know what mine is, basically daily, but collectibles and personal items are so insanely hard to keep track of I just use a ranged estimate
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