Personal finance sites and why I read them

While discussing this post privately, Aggie pointed me to the Tightwad Gazette’s website, which hasn’t updated since the time when the earth was still cooling, and the blog The Simple Dollar, which, it turned out, is good enough to keep me reading for hours on end (though I’d like some higher ratio of meaty to brief postings – but I’m probably in the minority among blog readers). The Simple Dollar has the kind of strictly-finance stuff that always makes my eyes glaze over, but also lots of practical tips for reducing debt, budgeting and how to live frugally and enjoy it. I’ll be studying it a lot in the next few weeks.

Last February, I got very interested in the blog of the You Need A Budget website. Their product is a range of personal budgeting tools ranging from well-designed spreadsheet templates to a fully-fledged application for Mac and Windows. I followed the blog for a while, subscribed to the course, kept detailed financial records for a few weeks, then decided that I probably didn’t need a budget anyway. I need to reconsider that, considering how I managed to overspend this month compared to the targets I set for myself.

Both The Simple Dollar and YNAB are aimed at mainly American readers whose main goal is to live debt free. The Simple Dollar’s main author has a life story involving a financial meltdown; I can’t readily find the backgrounder on the YNAB site anymore (something about it began rubbing me the wrong way back in February/March, so I stopped going), but if I recall correctly, the author has always been concerned about avoiding debt. In any case, I’m not a perfect match to the sites’ target audience. I’ve always been debt-free , and while I did have my own financial crisis last year, it resulted from my income drying up while I didn’t have an emergency fund. So I could solve it by first going on the dole, then getting a job as fast as I could. Within three months, I was financially healthy and saving money.

The reason I’m now getting more interested in personal finance/frugality sites is that I have my own set of goals that involve having a lot more money than I have right now. My (modest) translator’s salary allows me to live well, but leaves little space for what I really want, which is to travel and eventually emigrate. Before that, I want to take driving lessons, which in this country don’t come cheap at all, and learning to drive after the age of 35 is probably going to take me a lot longer than it would have done when I was younger. I also have a few ticking time bombs in the form of rebates that I will no longer qualify for in the near future, replacement costs for household items such as my 20-year-old fridge and my computer equipment – stuff like that. Right now, I try to save 300 Euro a month at the start of each salary cycle, plus whatever I took out of savings again during the last salary cycle — so if I come up short during July and take € 150 out of savings, I put € 450 into savings as soon as my July salary comes in.

This month, that’s kind of gone to hell. After stashing away that 300 Euro, I only have another 300 in disposable funds each month, and I kind of depleted that with the cost of a trip to Utrecht for a wedding, a gift for the bride and groom, dress footwear for the occasion (which I was going to buy anyway, but if it hadn’t been for the wedding, I’d have held off for another couple of months), the new hosting plan for my website and a few other, smaller things that I’ll need to track down. I’m not hurting, but a bit more clarity and restraint in my spending would help me a lot, especially in the area of not having to unexpectedly eat lentils for a week. I like lentils, but not every day.

There’s one step I’ll be taking this month; after a year of only being able to use it evenings and weekends, I’m giving up the studio I share with (as of August 1) four other artists. That’s going to save me € 50 a month, and I’d done that immediately after signing on the dotted line for my current day job, that would have put € 600 in my pocket by now. That’s one discount plane ticket to the US if I book early!

I’m also looking at the income side of things. I’ve decided that a second job is out, for the time being, and while selling my originals can deliver a nice bonus from time to time, it’s not structural so I can’t count on it. That’s something I’m going to have to figure out.

Update: More from Aggie on socioeconomics and tightwaddery

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