A good starting point to read about my set up: My Financial Framework and System
Four main accounts:
My paycheck gets divided and put into these accounts automatically. I use the balanced money formula to determine the appropriate values for each Savings, Needs, and Wants accounts and their respective budgetary limits. The framework suggests keeping your “needs” expenses (groceries, rent/mortgage, etc.) under 50% of your net income, 30% for wants, and save 20%.
I’ve been able to save 45%, maintain my needs at around 35% of my income, and use 20% for wants.
Tracking everything using Mint:
- See trends by category
- Tag transactions
- Decent iOS apps
- Took me a while to build credit in the States since moving here a few years ago
- Wanted to get good at spending the real money I had rather than make-believe credit
- Once I got comfortable there, started using cards exclusively to take advantage of points
I wanted to make sure that my credit card payments were taken from the right buckets from above so here’s how I make sure I do that:
- Buy stuff using credit card
- In Mint, tag item like
- Buy other “needs” stuff and tag it needs
- When I want to make payments, I go to the
needtag and Mint shows me the total for those items tagged
- I make that payment
- I untag
needand tag it
I also do this with items I’ve saved up for from my savings account. Once I make payments from needs or savings, I pay off the balance from my “wants” account because that’s what the rest of those transactions are.