Money Monies is hosted on wordpress.com on a free plan. I didn’t want to pay for anything before I get anywhere. Hence, the website comes with a lot of limitations. I have little control about what I can do. Nothing here belongs to me other than the content. After figuring out there is a free hosting service, I decided to make the move.
I can’t even redirect any URLs of this blog to my new website for free. WordPress wants to charge me USD 13 a year. Well… since this blog isn’t exactly the most popular thing out there, I think I can save a lot more money by moving.
2. Rebranding
I think Beans are cuter. hah hah.
Alright, see you on the other side! Twitter and Facebook page will remain for now.
This is the holy grail jacket. I’m never going to need to buy one again.
A friend
Yeah, but it’ll last longer.
Me, justifying why I need a really expensive bag to my girlfriend
I just realized I own $500 of underwear…
Another friend
Being frugal means you generally buy cheap stuff, but sometimes you go off and do a cost-benefit analysis on something more expensive and figure you’re willing to pay a premium for quality, comfort, and/or life-expectancy. A good example is high quality underwear. Once you catch a whiff of the experience of wearing any of the Internet’s favorite premium briefs, you might find it hard to go back to the cheap-o multi-packs Mom used to buy you from Walmart and Bob’s Discount Clothing.
Here’s an example (inspired by true events):
Let’s say you want to own 10 pairs of briefs, and compare the costs of cheap-o briefs with those of Premium Brand A. Using example prices from the table below, you calculate that the premium you will pay is $120. You find this cost-benefit reasonable, and you’re able to justify it further by amortizing the cost across the 5-10 years that you expect briefs to last, so you go ahead and decide to buy a set of premium briefs.
Cheap-o
Premium Brand A
Price per pair
$3
$15
Price for 10 pairs
$30
$150
This was a reasonable, controlled, and intentional use of your money. You looked at the costs, amortized them over time, thought about quality and comfort, and made a well thought out decision to purchase premium undies. Huzzah! You now don’t have to make decisions about underwear for the next 5-10 years.
A few months later, you catch a whiff of some internet talk about a new premium brand. Premium Brand B. Curious, you Google “Premium Brand A” vs. “Premium Brand B”. Just curious, you say to yourself. You find that the Internet has decided Premium Brand B is better than Premium Brand A. Ah well, you say to yourself. You were just curious, anyway. You’ve got underwear already. You don’t need to upgrade. But I wonder how they feel. So, you decide to order just one. Just curious, you again say to yourself. You’re not going to overhaul your underwear setup, you just want to give these new ones a try.
A week later, Premium Brand B briefs arrive at your door. You give them a try and compare. Lo and behold, the internet was wrong: Premium Brand B unquestionably is not better than your good ole’ Premium Brand A. You spent an extra $15 on this experiment, but you can always use an extra, you suppose.
Two years later, a popular media site posts a huge comparison of 15 different premium briefs. Your trusty Premium Brand A does well, but Premium Brand C comes out on top. Like you did with Premium Brand B, you buy one, just to try. And voila, this time, the internet was right: Premium Brand C clearly is better than your good ole’ Premium Brand A.
At this point, you’re now in a small bind. You have a set of Premium Brand A briefs that was supposed to be your go-to for the next decade. You don’t really need an upgrade, and maybe you can easily shrug off Premium Brand C. On the other hand, maybe you think about living with Premium Brand A for 10 years, knowing all the while that there was something better. Maybe that nags you for a while. So, you do it. You wait for a decent sale, and you upgrade your set. Another $150. But at least now you won’t live for 10 years thinking what could’ve been.
So where are you now? $150 for your initial set of Premium Brand A briefs. $15 to try Premium Brand B. Another $150 to upgrade your set to Premium Brand C. You now have $315 of underwear.
It’s not hard for this sort of thing to repeat itself. It’s too easy to ditch the 5-10 year plan again, for yet another holy grail pair of underpants that eventually comes into the fray. And if you’re not careful, you may reach a point where you one day wake up and say “I just realized I own $500 of underwear.”
Everyone budgets differently, and I’m no different. Here’s how I do it, month-in, month-out.
It consists of 3 parts.
Planning the month
Recording and categorizing daily transactions
Creating birds-eye views of finances
Planning the month
Every month, I divvy up my expected income into spending and savings categories. I give myself a spending buffer for flexibility. The category breakdown looks something like this:
paycheck
savings
investment account - retirement
investment account - non retirement
savings account
expenses
home
rent
insurance
bills
transportation
food
groceries
restaurants
office food
subscriptions
music
gym
discretionary
books
electronics
clothing
bars
shopping
gifts
travel
transportation
accommodation
food
entertainment
shopping
Recording and categorizing daily transactions
Throughout the month, I use a mobile app to manually record and categorize transactions. I prefer this over using automated tools that pull in transactions from your bank account, because the data usually needs to be manually cleaned anyway. It’s not too tedious, as long as the app you use is designed to make manual input easy. For now, that app is EveryDollar.
Creating birds-eye views of finances
At the end of the month, I tally up my totals, and move them to a spreadsheet with monthly data. It looks something like this:
Jan 2019
Feb 2019
March 2019
April 2019
paycheck
savings
investment account – retirement
investment account – non-retirement
savings account
expenses
home
rent
insurance
…
This allows me to see a birds-eye view of my monthly activity, in a way that I haven’t found in any free app. I can easily see what happened in any given month, and compare against any other month. It’s really neat when you start to accumulate years of this stuff. It starts to become a sort of outline of your life, where you can identify special events, and the start and end of eras.
I also have another spreadsheet that aggregates my annual activity. It’s probably more impactful because it underscores how little things add up, whether its expenses or savings. $100/month becomes $1200/year, and with a few more $100/month expenses easily becomes thousands a year. The money decisions that really matter are very clear when you look at the yearly totals. It’s a useful way to validate your decision making.
And that’s really it. I find that keeping track of where the money goes is enough to goad me into making more responsible financial decisions, especially when I can quickly see the big picture impact of those decisions. I get a real sense of what changes I actually want to make by gauging the amount of pain I incur by looking at certain numbers.
moneymonies.business.blog 