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Ask HN: How do you manage your finances?

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Re: Ask HN: How do you manage your finances?

#21

Post by JohnFen »

mbm wrote: post #13
JohnFen wrote: post #10

Earlier quoted context omitted.

This is almost exactly what I do, as well. There are only two other things that I do on top of that: I practice "pay yourself first" -- that is, I take 10% off the top of every dollar that comes my way and park it where it's really hard for me to get at it. Then, I practice "repay your neighbors" -- that is, I take 10% off of the remaining money and use it for philanthropic purposes primarily focused on my local comm…

I like that, keeps it very simple and straightforward. Have you always done it this way, or was there a previous iteration?

I've been doing this for over 30 years. I've iterated to this. The first iteration was not managing my money at all.

The watershed was when I had my first real success with my own business, combined with having my first child (both happened at about the same time). That forced me to face the reality that some sort of money management was essential, and through a couple of years of experimentation, I settled on this as a balance that worked well for me.

"Pay yourself first" is something I stole from the classic book "The Incredible Secret Money Machine" by Don Lancaster. That, by the way, is the only business book I've read that I found real value in.

Re: Ask HN: How do you manage your finances?

#22

Post by lotsofpulp »

mikhael28 wrote: post #12

YNAB. ynab.com - for power users only. If you don't actually care about tracking your money, don't bother.

If you run all your spend through BoA credit cards for the Platinum Honors cash back, BoA does it too.

https://www.bankofamerica.com/online-banking/mobile-and-onli...

Re: Ask HN: How do you manage your finances?

#23

Post by dt3ft »

tatrajim wrote: post #19

Read widely online and find a financially-oriented community that matches your level of expertise and situation. Serendipity can play a major role. Stumbling across early on LEAP (i.e. long-term option) trading and later learning to navigate the complex world of closed end funds, helped me -- after many twists and turns -- realize a very comfortable existence. Ruthless self-awareness of one's limitations is useful. E…

Never heard of LEAPs, will read in-depth about it! Thanks.

Re: Ask HN: How do you manage your finances?

#25

Post by eetus »

more_corn wrote: post #3

Spend less than you make. Stack rank your expenses and optimize from the top down. Take advantage of 401k match. Volunteer your time and preferably your brain. Invest in index funds.

I feel like every company I've worked at talks about "exploring" a 401k match every year, but never makes it happen. After a merger or acquisition, they'll bring it up again but it never happens.

Re: Ask HN: How do you manage your finances?

#26

Post by xur17 »

Everything flows into a spreadsheet I created that has a row for each month, and tracks my spending, income, and net worth. The data for each new row comes from a few different places.

Lunchmoney aggregates and categorizes my spending data.

My net worth is tracked in another spreadsheet that updates as asset prices change. This spreadsheet also tracks my asset allocation across my accounts, which is roughly based on the 3 fund portfolio from bogleheads (with a bit allocated to crypto as well) [0].

In terms of cashflow, I use Fidelity's cash management account, where I keep a buffer in a money market account. Income flows into this account, and bills flow out. They automatically liquidate the money market if I need more cash, which is nice.

And in terms of investing, historically I kept a 6 month emergency fund, then invested the extra every few months based on my desired asset allocation. More recently I have been increasing my cash cushion with the intent of paying off my recently purchased house in several years (since the interest rate makes it less attractive).

[0] https://www.bogleheads.org/wiki/Three-fund_portfolio

Re: Ask HN: How do you manage your finances?

#27

Post by skydhash »

After a few years managing my finance after learning that I should do it (review of my first year of full time work), what I retain is two things: Envelope budgeting, Every dollar is used, and don’t sweat the small stuff. I have an envelope for each category of spending, each goal and one for saving. My income is split between these everytime I get it. I don’t bother tracking small expenses (less than 10$) if it’s not done automatically (credit card). I used Ynab first, then banktivity, now I use Ledger.

My goal is only to track If I’m not spending more than necessary and my runway if I have no income.

Re: Ask HN: How do you manage your finances?

#28

Post by tombert »

Obviously there’s an infinite rabbit hole you can go down, but what I do is pretty straightforward.

Short term money: stored in a relatively normal checking account.

Mid term money: United States Treasury Bills. They typically beat bank interest, are just as safe (if not safer) as an FDIC bank account, and depending on where you live have a lower tax burden than regular bank interest.

Long term: Vanguard ETFs. I don’t have a ton of interest in spending hours every day trying to beat the market. I figure that as long as I can wait out bad economies, it’s better to invest in the total market than basically anything else. If you’re willing to hold onto the ETF longer than a year, typically the capital gains tax burden is lower than the income tax you’d pay in bank interest. Something like VOO or VTI are fairly low risk and since they’re not human-managed they have really low fees.

I am unemployed right now, but typically when I get a paycheck I immediately put 10%-15% of it into some form of the above savings, before I pay any bills. For psychological reasons I don’t really understand, if I pay my bills right away I never have any money left, but if I put 10%-15% aside immediately I still manage to pay my bills while also having savings.

Re: Ask HN: How do you manage your finances?

#29

Post by mbm »

tombert wrote: post #28

Obviously there’s an infinite rabbit hole you can go down, but what I do is pretty straightforward. Short term money: stored in a relatively normal checking account. Mid term money: United States Treasury Bills. They typically beat bank interest, are just as safe (if not safer) as an FDIC bank account, and depending on where you live have a lower tax burden than regular bank interest. Long term: Vanguard ETFs. I don’…

Awesome feedback, thanks for sharing. I like the Vanguard ETFs as well, keeps the long-term investing very simple.

Re: Ask HN: How do you manage your finances?

#30

Post by mbm »

xur17 wrote: post #26

Everything flows into a spreadsheet I created that has a row for each month, and tracks my spending, income, and net worth. The data for each new row comes from a few different places. Lunchmoney aggregates and categorizes my spending data. My net worth is tracked in another spreadsheet that updates as asset prices change. This spreadsheet also tracks my asset allocation across my accounts, which is roughly based on…

Thanks for sharing. What was it like purchasing a home in this market?
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