I consider myself a money-conscious person, so I was interested to see what Galia Gichon (www.downtoearthfinance.com) could teach me at the Creative Freelancer Conference that I wasn’t already doing. Her presentation was extremely helpful in the sense that it applied not only to freelance, but also personal and household finances.
Savings can be really difficult from time to time, especially in my case of just buying a house and needing to fill it with stuff. A few quick numbers snapped things into perspective for me:
If I save just $100/month for 20 years at 5%, I will have saved up $41K.
If I save $300/month for 20 years at 5%, I will have saved up $123K.
Hmm, this I like. You have my attention, Galia.
Of course, before getting much further she offers a “30 Second Checkup” that should be performed regularly (weekly, monthly; the goal is to know the numbers well enough that you know them without looking them up).
What do you owe? (mortgage, education, bills, etc)
What do you own? (savings mutual funds, etc.)
What do you spend? (food and discretionary)
What do you earn? (monthly, yearly, projections)
With these numbers always in mind, you can then plan a 30-minute finance date with yourself each week. Use the time to:
Pay bills
Give yourself a weekly cash allowance (that does not change regardless of if you are expecting a fat paycheck or nothing at all)
Check balances and statements online
Transfer money from checking to savings
Read a personal finance article (Saturday business section of NYTimes, Money, Real Simple, O, Time, Newsweek)
Easy enough right? I think that’s what I loved about Galia…everything she says is just so manageable, and I LOVE that weekly allowance says the same no matter what. We all know how easy it is to get carried away when a little extra cash comes our way. Stay modest, live simply, and hard times and retirement will thank you.
As for those paychecks that come in, I was surprised and intrigued by the breakdown of where Galia suggested it go:
Taxes (duh)
Debt (mortgage, and other bills that need to be paid timely)
Emergency fund
Retirement
Spending (vacation, shopping, dinner, whatever YOU want)
Of course she had many other wonderful tips and money points that I will fully consider in the coming weeks and develop into healthy habits. I definitely came out of the presentation feeling empowered, motivated, excited, and a little overwhelmed. The most important notion I took away from Galia was that it is never too late to get a hold on finances, and any little bit of consistent saving is a great step in the right direction. By staying organized you can worry less, and focus more on actually making your money.
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Stay tuned for more recaps of the 2010 Creative Freelancer Conference…
For you: What is your most successful money-saving trick?
