Thursday, June 20, 2013

How My Money Comes and Goes

One of my dreams is to go to New Orleans and eat all the fried chicken I can. I need money to do that.
photo credit: joshbousel via photopin cc

Read this if: 

1) You are interested in knowing where all of my money lives. 

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When I earn money, I like to put it to work so that it can earn even more money. There's no point in having it just sit there if I know what else to do with it. I wrote this post to show you guys what I do, and if you're curious about any of the things I talk about, please let me know! :D

Where do I get money? 

Jobs. I have lots of jobs. I enjoy jobs. I admit, I am a workaholic. >.> 

What do I do with it? 

For the purposes of this post, let's say I earn $6,000 a year and get $1,000 from other sources like gifts and scholarships. 

Here's the breakdown: 

1) I max out my retirement contributions. I have a Roth IRA that I contribute the full amount to, which is $5,500 for 2013 (it can change from year to year what the maximum contribution is). 
2) At least $500 will be kept in my checking account at all times, to pay my credit card bills. I don't spend much, so that's enough. When I do spend, I use my credit card to build credit. 
3) I have an automatic transfer thing set up to contribute money on a regular basis to my mutual fund. It's about $50 a month, so $600 a year. 
4) Half of what's left will go to my savings account, which holds money to get a car. I don't want to take out a loan when I go buy my first one 
5) The last half of what's left goes to an emergency fund (which is an online savings account). 

Note about investments: I choose to automatically "reinvest" the money that my investments generate when they are doing well, so I don't count that as money that I actually have. 

Is it really THAT important to have all of those? 

I am wimpy. I am scared of the unknown. I like being prepared. If you are anything like me, then yes, it IS that important. I don't want to live life paycheck to paycheck, always hoping for more money so that I can go on vacation. It's just my personal preference. 

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Are you wimpy like me? What steps have you taken to deal with fear of your financial future? Do you have questions about any of the things I've set up to put money in? Let me know in the comments. 

As always, contact me with questions or suggestions! You can either comment directly on the post or send me an email to moneymattersjoan@gmail.com. 

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