Money Musings 💠Sharing my own money systems… 🔢
A couple months back, many of you shared details about your spending (and vices) in an anonymous money survey. If you missed it, you can see the results here.
The second part of the survey asked about your money systems (the results are here!).
What are money systems?
Money systems are the apps, tools, accounts and strategies we use to organize our finances and achieve financial goals.
Here are the tools, accounts, systems and strategies I use, and what I think would be most helpful to others.
This of course is personal and will depend on your goals and what works for you.
First, the tools. I use tools for tracking.
A tool to track spending. I use a spreadsheet but this could also be a google doc or app. If you use an app, you just want to be clear that you know where your money is going.
A tool to track net worth. Our net worth is our total assets (what we own) minus our total liabilities (what we owe). While the number in itself might not be super important, the trend is helpful to see and it keeps us honest about what’s happening with our money.
A way to track goals. Keeping track of our progress towards our other goals is also important. This might be a debt tracker spreadsheet if you’re paying down debt or a high yield savings account that is set aside for something specific.
The accounts. The actual places that hold your money.
A no-fee checking account. Some of you shared very clever and strategic ways of using multiple checking accounts. You might have one for bills and one for fun. That’s amazing! My only recommendation is to try one thing at a time. Start simple and then add as you notice what will be helpful.
A high yield savings account. You want one that is free, provides some interest (~1.5-2.0% right now - a silver lining of increasing rates) and allows you to open multiple accounts or split goals into sub-buckets.
Retirement accounts. I have a Solo 401(k) for the Fiscal Femme but also have my rollover IRAs from previous jobs.
Investing account. For investing outside of retirement.
Others: An HSA for pre-tax medical expenses (and investing), the Dependent Care FSA for pre-tax childcare expenses, and 529 accounts to save for the kids' future school expenses.
The systems and strategies. How the money moves. A great place to start with strategies is where there is a problem or something is not working. From there you test out a strategy.
Auto transfers. Automatic transfers work well for me. I have money transfer automatically to my savings and investing accounts. I also have my bills and paycheck on auto pay.
Sinking funds. One of my favorite tools! Money we set aside each paycheck to sink so that it spreads out the cost. I have sinking funds for travel, home maintenance, and summer camp.
Money parties. My all-time favorite money ritual. The time I set aside to deal with my money - look at my expenses, revisit my goals and cross off any money to-dos that have come up.
A bill list. The number of bills I have has just gone up and up and it works really well for me to keep my checking account lean. That means I don’t want a lot of extra cash in there (because somehow it always gets spent!). Keeping a list of what bills come out of my checking and when, has made it so we can make sure we always have enough money in our account (but not too much). Create a calendar that is $$ specific, and update it during your monthly Money parties.
Other ideas. If you…
Have no idea where you’ll find room to save, an automatic saving app like Acorns or Digit
HATE spreadsheets… try Copilot or Mint. I also know some who do everything by hand. Whatever makes it easiest for you.
Whew! That’s my rundown. I’d love to hear what works (or doesn’t work) for you!
MONEY MOVE OF THE WEEK
WORK OPTIONAL CHECK-IN #2 - RUN A COUPLE CALCULATORS.
Last week we took inventory of what we have invested for retirement and how much we are currently contributing. Amazing! This week we’re going to take a look at what a couple calculators recommend as far as how much we need to have saved to retire and what that means we want to be contributing now.
Some information you’ll need to use the calculators:
How much you already have saved for retirement (you did this last week!)
Your age
The age you want to retire
Your monthly expenses (or how much you want to earn) in retirement
Don’t be afraid to play around with the calculators and to try different assumptions. You might plan to retire by 65 but are also curious what it would take to retire by 50. Check out what you’d need in both situations.
When you use some retirement calculators, they’ll assume that your spending in retirement will be 70–80% of your current spending. This is an old assumption based on people paying off their homes by the time they retire. Adjust this spending number to what you want or plan to be spending in retirement. This is personal and you set the terms.
Here are some of my favorite free retirement calculators. Feel free to send me yours as well!
YOU GOTTA SEE THIS
MONEY AND DATING.
Dating and early relationships can be stressful. Then add in money and it gets even more complicated.
Not only is dating expensive (hello inflation!), it can also be confusing. I always had questions like…
Who should pay? Do we split?
When should we talk about money?
How do we split expenses?
Is that a financial red flag?
What are my financial green flags?
And the list went on and on. While a lot of the questions around money and dating have stayed the same, a lot has changed since I went on my last date as a single woman ten years ago.
I got curious and decided to poll my community. Here’s what you shared: