Managing Your Finances 101, a job update, and more free templates

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A couple of days ago I told you all about how I was going to try The Simple Dollar’s 31 Days to Fix Your Finances. Well I suppose it is about time I give you all an update, considering I have literally spent 3 days just trying to figure out what my financial goals are and how to get there.

Days 1-3: Values, Goals and Plans

I like The Simple Dollar’s idea that your long term goals should reflect your top 5 values. Furthermore, I also like the idea that a short term goal is set up as a stepping stone toward the long term goal. With this method you are a) sure to stick to your goals because your values are your priorities and are b) able to break the bigger picture into separate steps. Of course, figuring out your values and then matching your goals to them is much easier said than done. Fortunately, I have an obsession with Google Docs lately and made yet another spreadsheet for my visual learner self.

As you can see my values vary, but for the sake of brevity (and because it is about as far as I have gotten), I will just stick to my #1 Long Term Goal: becoming completely financially independent so that I can move to New York. This of course is a big umbrella goal, because within that goal things like marriage and family can become a part of it (although not any time soon I believe I am still way too young for that). And obviously, I needed to compare the cost of living in New York to that of Miami and other cities so that I would know exactly what I am working for, so I made another spreadsheet with the help of Salary.com’s Cost of Living Calculator. After I had that figured out I could start planning for my stepping stone short term goal.

Short Term Goal: Figure out the income, budget, and open the appropriate accounts.

I already figured out Step 1 of this plan a while ago, which was to learn how to make a decent amount of money online so that I would have the extra money no matter where I went. Sure, it took a few months and I obviously want more, but thanks to the unemployment rate in Florida I found myself with some extra time on my hands after graduation.

Step 2 is also already complete because I found another job. Granted it is a part time, but for right now the freelancing mixed with a job for an international company is working out fantastically in the finances department.

Step 3: Figure out the budget.

I decided to go with MSN Money’s The 60% Solution budget just because it seemed easy for the mathematically challenged. Basically, you cut spending to 60% of your income and the rest goes into savings. It’s a good and effective way to build up a nice savings cushion.

Step 4: Set up an IRA account.

Step 4 actually has nothing to do with moving to New York, but has a lot to do with planning my finances for the future. You may recall that in the About section I ask what the hell is an IRA? An IRA, also known as an Individual Retirement Account, is a savings and investment account for retirement. I know that at the age of 22 retirement is a long time away, but the earlier you start the more you can make.

I actually have this huge book entitled The Retirement Savings Time Bomb…and How To Defuse It sitting on my desk. It is written by IRA expert Ed Slott and my father swears by it. Obviously I will have to get back to you all on how the reading goes, but basically I hope to have an IRA account ready and kicking with investments within the next year.

Step 5: Pay off my debt.

The great gods of credit have been looking out for me because I don’t pay any interest on my credit card, which of course means that I do not have to worry about my credit card exploding. However, I am very picky about paying off my credit card and am proud to say that I am a mere $215 away from being completely debt free. This is huge considering I had maxed out my card in Europe and I will be so relieved when the money I make will actually belong to me and not the bank.

Quick Job Update:

Last week I also mentioned that I was teaching my first class for Berlitz. I just wanted to let you all know that I absolutely LOVE IT! My first student’s name is Daniel. He moved to Miami from Cuba not too long ago and I am teaching him English so that he can nail a job interview to be a commercial pilot. I asked him what was his goal in learning English and he said “I want to make a future for my family and get ahead in America.” It was basically the best answer I have ever heard and I am delighted to help him in attaining that goal.

The Free Templates

Since I am figuring out my life via Google Docs, I figured I would share some of the templates I have made in case any of you find yourselves in the same boat. Consequently this is probably the most organized I have ever been.

Values and Goals – A simple spreadsheet that will help you match your goals to your values and help you make a plan of action.

Cost of Living Comparison – Planning a move across the country? Use this spreadsheet to help you figure out how much money you need.

Check out what I’m reading!