Actual Expenses: May 2012

Of course my actual expenses are always a bit different than I expect at the beginning of the month.  My May budget was posted here.  Overall, I think this month was a bit expensive, but I'm starting to feel a bit more in control of my spending.

Apartment: It's nice to see this percentage going down.  I had to pay for a week in my old apartment but from now on I'm paying cheaper rent every month! Yay!

Utilities:  I'm happy with this for the moment.  Splitting internet, electricity, water etc. among three people is nice.  We'll have to wait and see what the summer heat does to this.

June 2012 Budget

I'm super excited!  This is the first month of paying rent only for the new apartment!  Which means I'm finally spending a reasonable amount of money on housing!

Apartment:  25%!!!  This is down from almost a full 50% of my income because of my move!  I'm now sharing a two bedroom apartment with three people.  Without roommates this would never be possible.

Utilities:  I believe that I've over estimated the cost here.  Since I just moved and summer is quickly heating up, I'm not sure what to expect as we start to use the AC.  I typically like to budget for the largest month of the year and then use any excess to fill in gaps other places in my budget.

Learning about personal finance

What I knew before I started reading blogs and immersing myself in the world of personal finance:

• Pay off your credit card in full every month
• Saving for retirement should start as early as possible
• Spend less than you earn
• Debt is bad.

What I've learned since:

• The whole concept of an emergency fund
• Living paycheck-to-paycheck isn't necessary
• Idea of paying yourself first (automatic deposits to savings)
• Tracking spending is eye opening
• Not everyone has to work their whole lives until retirement (ie concept of financial independence and/or early retirement)
• How to build a budget that works for me!
• Stop Wasting Time!  Start working towards your goal now!
• Have a buffer!

What I still need to learn:

• Investing
• Retirement accounts
• Rental properties?
• Monthly income streams
• EVERYTHING related to personal finance post building an emergency fund!

While I don't think I was completely ignorant in the ways of personal finance, I most certainly was not on top of it!  I didn't think it was an issue until my paycheck had a few issues and the university was transferring money in and out of my account irregularly in order to "fix" the issues.  It took them four months to get it all straightened out and during that time I was a financial mess and worried.  Luckily this event spurred me to action, and I've been learning ever since. 

The reason I started this blog was to track my evolution through personal finance from basically zero until I reach financial independence.  I find the process of learning interesting: at one point you look at knowledge and say that it's too hard for you to ever understand, and later on you look at it and it seems like it couldn't be more obvious.  You can't teach from the perspective that it's obvious.  You must struggle through material to truly understand it.

So, dear readers, as I feel I've finally mastered budgeting, saving, and emergency funds, what exactly is my next step?

I don't like to buy things.

I don't think it's surprising that I'm fairly careful with my purchases.  I don't splurge on wants very often, although I can understand that it takes time to overcome emotional spending.  Instead, most of my every day purchases are food (good quality food, but still food from a grocery store such that I can make my own meals).  Frugality is a clear way of life for a number of people interested in personal finance.  However, sometimes things come up that can disagree with that frugal nature.  Right now I'm struggling to justify to myself that there are a couple of things that are really worth my time, money and attention.

1. A new prescription for my glasses.  It's been about two years since I last went to the eye doctor.  I HATE going to the eye doctor even more than I hate moving.  I know a lot of people avoid the dentist with a similar level of dislike, but for me, it's the eye doctor.  I have a fear of things near my eyes and have passed out on more than one occasion when they do the glaucoma test (the pressure test where they blow air into your eye...).  I need to suck it up and schedule an appointment.
2. A new bike. 

Tracking Spending and Net Worth

I started tracking my net worth by accident.  What I was trying to track was which credit card needed to be used at which part of the month such that I didn’t accrue any interest (aka such that I would be able to pay all my bills off in full.)  I was living paycheck-to-paycheck and while I wasn’t in debt, I didn’t have my finances under control.