Balancing your checkbook

I'm old fashioned. I know this. I do many of the things that people's grandmas' used to do. One of the those things that I just can't believe that people don't do, is keep a checkbook registry (and a similar concept for credit cards too). It is pretty simple. It has gone away slowly. Starting with carbon copy check books, where a copy of what you wrote the check out for gets saved in your checkbook so that you don't slow down the grocery line. What? Nobody writes checks for groceries anymore? Really, nobody should be standing in line for groceries anymore either, with Covid and modern online grocery shopping being such a great thing (not the covid part, of course). But you get the idea. Everyone talks about finances as though there is a mystical person running their lives. They don't know how much they spend for X. As a lifelong balancer of the checkbook, I could tell where my money was going, especially when I balanced out what I thought I spent with what the bank thought I spent. Almost always, the error was in my favor, usually because I made a mistake and entered things more than once. Sometimes, I was shocked to learn that I didn't have 2 nickels to rub together, when I thought I had money, because i forgot to enter a check or some other payment. Maybe an ATM receipt didn't get spit out and I ignored it. That was on me. I should have written it down. So what brought this up? I was talking with my wife about some businesses that we work with tended to be a bit fast an loose with the EFTs. Funds dropping when it wasn't unexpected, differences from what they said and what they did, mostly around planning for big chunks of money to disappear from our accounts. We've also had some issues with Quicken because we use it the old fashioned way. We enter our spending manually, and then compare to what the bank has for us. Which seems to be very different from their normal user base, because they start most conversations asking about downloading transactions from your bank. Which can be cool (like Mint, and YNaB and others), then it does what the computer thinks it should do with the charges and credits. It just doesn't feel like I won't lose $10 here and there to people that hack my account.

Savings snowball

First there was the debt snowball, now the savings snowball. Like a debt snowball, you put the minimums toward all of your savings, and then you throw all of your extra money at the smallest savings goal. When that one is saved for the year, then it is on to number 2. And so on. The difficult part of this strategy is not the doing, so much as the steps to take place before the doing. Figuring out which is your smallest or most important savings goal is the trick. Do I start saving for my Roth IRA first? What about my work 401(k) or 403(b)? Where is my big emergency fund (following the $1000 one from most debt snowballs first step)? It's too much to think about, I give up.
Okay, like most things in life, there are some pretty simple ways to help you choose which order your savings needs to happen to make you comfortable and happy.

Number one on the savings chart is the BIG emergency fund. 3-6-9-12 months of after tax expenses saved somewhere that you can get at it easily. Most of life's emergencies are willing to wait for a transfer from ING or some other online financial institution, so that's where my BIG emergency fund goes. If you aren't done with this one, then the minimum payments on your 401k would likely be your company match. Roth is up to you. My Roth thought process is how long am I going to be in the income range where I can contribute. Forever? Maybe Roth isn't that important. 2 years? Roth now, because you can't Roth later. This is after the big emergency fund is fully funded. Remember, just like the little ef, this is a buffer from something happening that will put you back on the track to debt.

Here's a sample list:

1. Big emergency fund(ef)
2. 401(k) type account with match, depending on your situation
3. Roth if you can
4. Education Savings Accounts (ESA)
   
5. Cars, computers, other big ticket items that you want in the future, and you must save up for to not go back into debt. This might go higher in the list too, if your car is on its last legs.
6. 401(k) type account to the max.
   
7. Other savings (takes a lot of money to get to this point in the list, maybe a yacht savings account or something here not covered in #5
   

Remember, you are making minimum payments on the all but the first item. Sometimes that minimum is 0, for other people they can't let the 401k go, so that gets minimums to make it for the year.

Why do people spend too much

There seem to be many traps laid out there for people to spend too much money. From the "free" financing to places that deliver food ready to eat right to your door, it makes excess easy and causes problems for people.