My friend suggested that instead of budgeting my expenses, I should try reverse budgeting by putting money into savings and investments first, and how much I want to spend of that leftover is fair game. I liked the sound of reverse budgeting, so I gave it a shot this month.
Why am I not listing out my expenses this month?
Way too much money man. I’m going on a lot of trips between August and October, so my expenses have skyrocketed. July 2017’s expenses were around the $2,500 mark. (bangs head on pillow)
How’d it go with the reverse budgeting?
It was hard to do it properly. I had to pay first month, deposit, and security for my new apartment, while not getting my deposit back from my current apartment until some time in September. And my mom is still waiting to cash in 3 checks from me for car insurance and phone bill. I’m not cash strapped, but I just feel oy – do you know what I mean?
Last month I made some July 2017 goals:
- Pay for my MicroMasters class: Done
- Put 10% of paycheck into savings and 5% into other accounts: Incomplete
- Find an apartment with a monthly base rent of less than $800: Done
- Understand my long-term financial health: Kind of done
- Increase my salary: Done
Let’s see what is happening in my Vanguard…
I have both a traditional and a Roth IRA, and I have not contributed to either account for 2017 yet. Both accounts have a contribution limit of $5,500 – and I just made it my goal to max out both accounts this year.
The main difference between traditional and Roth IRA depends on how you think your income tax bracket will change. Do you think the tax rate you’re paying on your Roth IRA contributions today will be greater or smaller than the rate you’ll be paying from distributions from your traditional IRA in the future? It’s not a question that anyone has a definitive answer to, unless they have a time future and can go into the future then come back and let us know. You can read more at RothIRA.com
I think I’m having a little anxiety attack because of all the mutual fund and ETF options available. You know what, I’m going to write another post about distilling this information at a high level to help me and hopefully you understand.
Besides investing, how am I feeling this month?
Overall, pretty great! I feel a lot calmer about my personal finance now. It’s going to be a rough couple months with all my travels, so I need to be more conscious about how I’m spending.
Some highlights of the month:
- Found an apartment that’s in the same city I live in right now for $730/month, everything included except laundry, which is $2.50 for wash and dry. I’m saving about $250/month from what I’m paying right now! Can I get a HUZZZZUUUUHHHHH?!?!
- Found the joy in cooking with friends now. If I haven’t mentioned previously, it’s so hard to cook for one person. I can never buy too many veggies at once because it’s difficult to use it all up before they go bad. And then i stop buying a variety of veggies because I’m worrying about the same thing… I’ve been cooking a lot more with Becca and Sheena now though, and I love it. LOVE IT!
Upcoming financial things (including goals) in August 2017:
- Put 10% of paycheck into savings, $400 into traditional IRA, and $400 into Roth IRA.
- Let my mom cash in at least 1 check from her stash of checks from me.
- Buy a rain cover for my upcoming Asia trip.
- Bring items to sell to Covet Boston.
I was combing through the notes in my iPhone, and I wrote this financial mantra down a while ago:
“I deserve to be rich, have every right to be rich, and that being rich is an inside job. It’s up to me and only me.”
I hope you guys are enjoying this series! Let me know if you have any comments or suggestions for future money posts.