I have what I like to call “financial anxiety.” To sum it up, I worry about money constantly and am obsessive about saving and spending. I have a couple of theories about where this anxiety comes from and it’s a little awkward for me to share all this with you, but I’ll spare the therapy session and tell you why it has become a good thing…
When I graduated in May of 2010 I moved to Dallas with zero dollars in both my checking and savings – cue the anxiety. It was the the most exciting and scariest time of my life… Exciting because I was starting a new job, living in an apartment by myself, driving a new car, and living completely off of my own financial independence. Scary because each month I had rent, utility bills, a big car payment, insurance I took care of, and a lot of other expenses that come with living on your own. Oh, and I was living in a city with access to some of the best shopping around. I know I’m not the first twenty-something to be in this situation – I have friends across the country that are doing the exact same thing – but what’s funny is that I’m always getting asked about how I manage my finances. Do you want to know? It’s pretty boring and will probably make you realize how completely type-A I am…
Excel became my best friend. I have one workbook with five different tabs: 1) keeps track of the accounts I pay each month in the order they are due with the website link and my log-in and password (there are 13); 2) is broken out with monthly fixed expenses (in the order they are due) as rows and months as columns, it keeps track of how much I pay for each expense month-to-month and totals them; I also keep track of my monthly earnings here and deduct the total monthly expenses to see exactly what my disposable income is; each calendar year I start a fresh tab; 3) the tab with a running list of every. single. purchase and expense I make. That’s right, I’m the crazy person that collects all my receipts, then I manually enter them into my spread sheet with the date spent (in order), what the expense was/where it was made, the total (withdraw is one column, deposit is another), and what my current balance is. I know what you’re thinking, “you idiot, this is why we have online banking!” And trust me, I know it’s excessive – but it’s the best way for me to keep my spending in check when I see where every penny goes and I know exactly how much I have at any given time. I notice when I’ve been shopping too much or eating out too much. If I don’t hold myself accountable for over-spending, who will?
Aside from my OCD excel-ing, I automatically had money taken out of each paycheck to go directly into savings – as much money as I could while still having some left-over for variable expenses. Having zero dollars in my savings scared me and I made it my mission when I first started my job to spend as little as possible and push as much as I could into savings. Bonuses went directly to savings. So did tax returns, Christmas money, etc. As I was doing all this someone told me that the best rule of thumb you can have is to keep at least 6 months pay in savings in case anything should ever happen. This because my goal. I wish I could tell you how much I’ve been able to save since starting because I’m a total nerd and it’s something I’m really proud of. But what’s the point of having money just sitting there? Well, I got in a car wreck last summer. And had a giant deductible I had to pay out of pocket… If I didn’t have my savings as a fallback I would have freaked out. I started a new job six months ago and my salary changed – I’m not saving at the moment so having that account as my back up is really comforting.
Do I shop? Yes. Go on trips? When I can. Buy things for the hell of it? Absolutely. But because I keep such a close eye on everything I don’t worry when I hand over my card to buy steaks at the grocery store, snag another gorgeous dainty necklace online, or take home really good mascara. I really don’t shop (that’s Sally’s job) so when I do get something for my closet it’s extra exciting – I love saving up for the really special things (like this some-day bag) on my wish list and being so in-tune with what I can afford to spend has made me realize that I kind of have everything I need…
Having a 401k, and IRA and putting money in investments is the next frontier for me. I wish could check all those things off my list right now but timing is everything and I just haven’t yet. What I do have a credit card to establish my “good” credit. I only use it to buy gas and I always pay the bill in full when it’s due… It’s not one of those cards that gives you points the more you spend but it has been a good way for me to responsibly use a credit card.
I’m really happy that my parents taught me about the concept of money at an early age and I’m even happy they never paid for my gas, gave me an allowance, or handed me money on my way out the door. I think it’s why I love working so much – being able to have jobs that I enjoy that also help me make a living has made me so happy and given me the best sense of independence. And having my savings has allowed me to take risks and leave one job for another that I knew would make me happier. I really hope I didn’t put you sleep with all my awkward money talk – but let’s be honest, we ALL have expenses and budgeting is a part of life! And now you know, I’m not a girl that just obsesses over pretty things and buys them whenever I want – I’m a girl that pays a lot of bills, obsesses over pretty things and plots whether I need them or not and if I can budget them into this month 
Email me if you want me to manage your personal wealth… And if reading all that made your head spin and you have no idea where to start, you should check out the “How to Budget” handbook from The Everygirl for a great visual and starting point!
(Image via Chanel Craves)
I love it! I use excel exactly like you!! I have been keeping track of expenses since I can remember…its all in one huge spreadsheet…..you are such a great role model
This is amazing. I need you to help me get on track! I have such a difficult time with managing my finances (blame it on the job + it's temptations) and although I'm doing much better now than say a year ago, I could improve vastly!
When I graduated from college I got "Young, Fabulous, and Broke" by Suze Orman and it was the best present ever. While not all of it pertained to me at the time, the older I get, the better resource it becomes. I love the idea of using a spreadsheet for tracking bills. Do you set reminders in your phone or check it on a daily/weekly basis?
Amen sista! I wrote a post about my similar type-a/savings ocd last week. I have held myself back from doing so many things because financial security is so important to me. Just the thought of having my bank account go below $x makes me dizzy. I'm glad I'm not alone. Oh and get on the 401k…like now. You must contribute at least as much as your employer matches…it's free $ and a greater return than any bag or shoe. hugs, kkl
You're NOT a crazy person. I use nearly the exact same Excel system. Thanks for this post. I think this is definitely relevant to most of us!
Out of college I read a great book called Smart Women Finish Rich and it really gave me some great tools for saving/spending. As finances have gotten more complicated with marriage and children, it's been great to have that foundation and understand finances better. And for the record, for us Type A individuals, the anxiety never really goes away
Go, girl! I love how real you are keeping this Toast Talk series.
Great post!! I've been thinking about finances a lot lately…I use credit cards as my main method of paying, and I pretty much always pay in full but it gets confusing for me when i have to calculate my earnings and align that with when my billing cycles start and end and when payments are due. I just might have to try using a spreadsheet like you do, but I also really wanted to avoid having to enter every single penny that I spend into a spreadsheet. Sigh!
I've done it before though, when I moved to New York, and was able to save quite a nice chunk of change (although I also didn't have any bills to pay aside from my cell phone service, which at the time was about $20US a month.) So it looks like I need to start up again, especially since I don't have that much in savings (though I do have a 401(k)).
Thanks for the inspiration!
i started doing the same thing in excel a few months ago. my friends think i'm crazy, but online banking tools just do not cut it for me. entering my transactions in helps me understand where the money is going. plus i extend my income, known expenses and credit card payments out for a few months to get a snapshot of where things will be tight and where i have a little extra room for something fun. it has been a huge help! thanks for sharing.
Loving this series and this insight into how a fellow twenty-something is making it work! Personal finance is something I'm teaching myself hard and fast as a small business owner and like you it makes me pay much closer attention to where each dollar is going. Cheers to you for keeping it real! xx
Good for you! Very inspirational and very smart! I am incredibly OCD about my money too. Hey, we work too hard to no be. http://www.fashionandafellow.com
I love this smart, honest post! Thank you for sharing how you think of money and how you budget. Budgeting helps me keep my perspective on money in check, too – sometimes you need to tighten the reins and sometimes you need to live a little. Sounds like you have a nice balance!
It was so so great to read this post! Finances are something I worry about all the time. My friends constantly tease me for saving all my receipts and keeping tab of my earnings/spendings in excel like you do, but I'm glad to know I'm not the only one out there. My parents also raised me to be very money-conscious, which has certainly come in handy as I've now been living in NYC on my own for a little over a year. Being in this city on a very tight income has forced me to be even more responsible with how I spend my money!
what a great post for today's toast talk! as scary as money and managing finances can be especially for our generation, doesn't the feeling of independence make you feel you're on top of the world, it totally dose for me! btw, i think we maybe kindred spirits!
molly this is great! i always am obsessing over money, too and i always feel like i'm the only person i know who pays for everything myself! i really need to start tracking exactly what i'm spending… i always get anxious about it and pretend to have more money than i do. you're amazing, thanks again!
This makes me want to put a reminder in my phone to call you in about 10 months when I graduate and will most likely start freaking! You are so impressive, go you!
I love this post. I have an Excel spreadsheet too, but still the savings are to be started. I think with two children & London living they're going to take a while to build up. Do you fancy coming to London to help me get organised!? x
kudos to you for getting your finances in order EARLY! I did the opposite after college. I spent and spent and spent and had no guidelines or idea how to manage my finances. It put me in terrible debt that I am STILL paying off (from my 20's). Lesson learned and now I only pay cash and I am MUCH wiser in my purchases. Now you know why I am always looking for the Cheap and Chic
OCD, please. If you are, then so am I. I use excel to manage my finances and totally obsess over what is necessary to buy and what isn't. Every once in a whie I splurge on a big ticket item, but I'd rather see my money in my saving account. Every new years, I set a financial savings goal…and I am proud of meeting my goals each time. anyhow, kudos to you! Keep up the financial savvy!
xo, Londa
http://www.designroundup.blogspot.com
I love this post. I graduated in 2010 and I had nearly $0 in my bank account. Once I started to work, I started to save a huge portion of my paychecks. I had money going into 401K, stock option, and a savings account. But it paid off because earlier this year I was able to buy a brand new car. In cash. And I am damn well proud of it. =) And, yes, I still have disposable income at the end of the day to spend on little treasures. =)
Wow, that was ridiculously helpful. I texted my boyfriend with the link to your post and said "this, I need to do THIS." I don't think you should ever think twice about writing something for fear of putting people to sleep, even financial stuff – you might have just made me more responsible. Thanks Molly!
I love this and am SO proud of you for doing this immediately after college! Thanks for being so open and real! I do almost exactly the same thing you do and after 5 years of working it feels SO good to look at those dollars adding up. You'll see
Keep it up!
p.s. I'm really glad we met at the RUE party tonight! Hope to see you at Madewell next week!
smiles,
Isabel
http://www.laconceptiondesfemmes.blogspot.com
Finally catching up on this series-I love it so much! I need to start an Excel sheet because yes there is online banking but have to physically input the data myself would help me hold myself much accountable. Thank you so much for sharing your system!
I think this is a great reminder that all bloggers aren’t twirling the streets of milan with their handy dandy trust funds to help light the way. Sometimes it is a little overwhelming to see every other 24 year old on the internet carrying a $2500 purse and wearing $800 shoes. How do they do it? I still don’t really know the answer to that. I know I purchased a pair of Valentino Rockstud heels after a lone pair in my size were returned to Nordstrom. I felt it was fate. But then I got them home and wore them around the house, and all I could really feel was guilt. I just felt so bad to have spent the money on shoes I would maybe wear a few times of year at maximum. AND there’s the fact that my husband is a financial advisor and every penny spent seems to get the “do you know what that money could be doing if it were invested?” speech. I knew he would croak out if he found out how much these glorious pair of shoes cost, so I sadly returned them. I still get depressed when I see them in my favorite street style images, but oh well. They are just shoes right?
A very practical post in an often unpractical world. Thanks!