Category Archives for "Earn"

Personal Finance Basics 101 Part 1

Let’s start with the basics for a sound financial “plan” (plan is in quotes because neither this post nor this site has any hope of addressing a proper financial plan — as done by a professional).

First and foremost, earn more than you spend. Ideally, you would set some money aside each month for a rainy day fund, a retirement fund, a college fund (if you have children or one day think you might), and a maintenance fund (fridge goes on the blink, car refuses to start, bathroom sink springs a leak, etc.). It can be small amounts, either in percentages or in dollar terms, but still, set some money aside.

At the very least, do this:

  1. Put 10% of your gross income in a retirement account of some sort, preferably in a mutual fund family like Vanguard, Fidelity, or T. Rowe Price (many from which to choose).
  2. Have funds available to you equal to 6 months worth of income. Most professionals will tell you to have 6 months worth of income available as liquid cash (i.e., a bank account or money market mutual fund). Some of the more practical professionals will tell you “liquid funds,” which could mean a credit card. This is how I operate. Now, I do have some money socked away in a savings account, but it certainly isn’t equal to 6 months of my income. However, I have way more available credit than that, and I don’t ever expect to have to use it. It’s there for a rainy day.

So, to recap: 10% in a retirement vehicle and have access to the equivalent 6 months of income.

If you don’t do or have either of these, don’t do anything else until you do.

The reason you pay your bills every month and conveniently neglect to save anything is because you put a priority on paying your bills. Change your thinking: Put a priority on paying yourself first. Check out (from the library! — money-saving tip alert) David Bach’s excellent book, Automatic Millionaire for great tips on finding ways to do this by automation.

Welcome to Money Hacks!

This is my maiden post on the Money Hacks blog. I welcome you, my readers, to my personal finance site, where, together, we find, explore, try, and buy various money tips and tricks (or hacks). I want this to be an interactive and iterative journey, where you glean as much from me as I do you (perhaps even a little more).

The goal here is getting your financial self in shape. The persistent conflict most of us have is spending money versus earning money. Oftentimes, we earn money only to have spent it last month. Of course, only our government can perennially run in the red.

It is up to each of us to find ways to run in the black. Since most of us work “regular Joe” jobs, we cannot really expect to get 10-20 percent raises each year. More likely, we get 2-3 percent, if anything. It’s difficult to earn more than we spend under these circumstances, especially with interest rates on the rise, gas prices undergoing serious increases, and energy costs going through the roof.

So, the focus of Money Hacks is to learn how to save money — i.e., spend less than you earn. It isn’t just about being cheap. I know as well as you that there are certain things that you’re just going to buy, no matter what. For some, it’s our morning coffee. For others, it’s iTunes downloads or that iPod you’ve had your eyes on. So, frugality is a part of this, but like dieting, everything must come in moderation. Once in a while, treat yourself.

Now, treating oneself is where we can learn to save money by spending money. There are scores of shopping sites online that can help us ferret out the best deals on those things “we just gotta have.”

But in other respects, saving is simple: Spend less than you earn. That’s what this site is about.

Occasionally, I will discuss things a little off the topic of saving, but in the realm of personal finance or investing. I hope you will indulge me. Together, we might learn something.

I sincerely look forward to making many posts, interacting with you, and learning together something neither of us knew until we met. I would like to give you a preview of my first several posts, but I am so busy with this site and a couple others that I simply haven’t had time to put much thought into the first posts.

My suggestion, at first, is to become familiar with the Links to the right as well as with the Books also on the right. These are the primary sources from which I will find those sparks that lead to relevant posts.

So, please, enjoy and come back often. Make sure you add this site to your RSS feeds and to your bookmarks.

About Me

My name is Bill and I have been collecting money hacks since 1966.

After getting my degree in Economics, I entered adulthood, out on my own for the very first time. I got a job, an apartment, and a car, racked up some debt, and paid it down. Living in the now didn’t really prepare me for what was to come: My Future.

Fast forward 20 years and I find myself with a mortgage, 3 cars, two kids, what I consider to be a well-paying job, and I can barely make ends meet.

Thus, my entry into finding ways to save, invest, and earn money. I hope to bring you unique, relevant, and useful information. Feel free to contact me at billspaced@money-hacks.com or on Twitter with suggestions for improving the site, questions, tips, tricks, or money hacks you’ve discovered, or anything else that comes to mind on the topic that concerns us all: MONEY.

After all, money does make the world go ’round.

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