Can’t believe we have 55 more days, and then it’s 2024!

So much and so little happened this year. First of all, I finally achieved 100K networth spread across all of my assets. Here’s what I have:

• 401 (k): $65.4K
• Roth IRA: $11.7k
• Marcus by Goldman Sachs: 14.7K
• CIT Bank: $5K
• Checking: $755
• HSA: $4.4K

How did I achieve this? 

Through a lot of hard work and sacrifices.

In this day and economy, you have to be smart about your financial decisions, so the decision to move back home and save on rent compounded my savings exponentially.

And my number one rule of thumb? Always pay yourself first.

What does this mean?

It means my paycheck hits my 401 (k) first. My savings accounts second. And then my personal checking account last.

Whatever shows up in my checking account then gets further divided into subcategories like mortgage (I live at home now, so I just help pay the mortgage), grocery, bills, and then last but not least whatever is left over is for me to use on whatever I want.

Guilt-free.

That’s how I’ve been maintaining my finances.

I don’t keep track of every little expense that I use my money on.

That’s frankly…a lot of work, and I don’t have time to list everything out at the end of the month.

The only time I ever calculate all my expenses is when a new year rolls around, and I need to recalculate how much money to set aside for the different categories I spend money on.

Not sure what I mean? Here’s how I’ve been budgeting my money:

1. Step one is to calculate all my expenses, separate them into four categories, and then create four checking accounts for each category. For example, bucket one is rent, bucket two is groceries, bucket three is bills, and bucket four is my fun money. Accordingly, I name the checking accounts based on the category they belong to. So, rent, groceries, bills, and fun money.
2. Step two is to calculate how much money I spend in each category per month on average. For example, rent was $870 when I was living alone so bucket number one would be $870. Bucket two would be $250, bucket three $200 (bills include utilities, phone bill, internet, etc), and bucket four is whatever is leftover. This is the budget I have created for each category of spending.
3. Step three is to deposit money at the start of every month into each checking account according to the budget I set in step two. Then, whatever is leftover I put into my “fun money” account.

Now, when the time comes for me to pay rent, I use the money in my “rent account” to pay my rent. Then, when I do grocery shopping, I use the card attached to my “grocery” account to pay for groceries. Same for my bills account. And whatever is in my “fun” money account, I just use for myself guilt-free.

This is how I avoid tracking all my finances. 

Because instead of counting how much I spend at the end of the month, I set a budget for myself and spend down from that amount.

Anyway, I hope this helps! 

My goal is to simplify personal finance by making it fun and relevant.