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This article is part of The Well Cultured Anonymous
Contents |
The Basics
The truly tl;dr version of economics boils down to one very simple statement (which is basically what you'll find in any Economics 101 textbook minus the fancy words:
- :: You have limited golds, which buys you things. Try to get more to have more things.
Seriously. In all of your Economics classes, this is the main concept: You, as a human, will never have enough money to cover every single want you will have in your lifetime. You have already lost that ability. You know that Power Ranger you wanted as a kid? You didn't get it, thus your (unlimited) wants were not satisfied, thus you no longer have the ability to say "I got everything I have ever wanted in my life".
The REAL goal of life is to take what you do have (current possessions, incoming money, etc) and turn it into things you do want (fun things, like hookers). This guide will teach you the very basics to managing your money right, so maybe when you're 60, you'll have a Taiwanese hooker on every arm. And maybe one will be like giving you a rimjob or something.
And for the love of all things, spending more than you earn regularly is FUCKING STUPID YOU USELESS DOUCHEBAG CUNTS. DO NOT REGULARLY SPEND MORE THAN YOU FUCKING EARN. If you don't think that creating a nice deficit for yourself is crippling then it's time to skip the rest and become an Hero.
LESSON 1: Budgeting
Budgeting is the act of taking what you're making (your income) and breaking it up in a way so that all of your bases are covered- that is, you can pay everything you have to pay (electric bills, phone bills, interbutt bills) and then having some money to spare for hookers and beer, and actually knowing you have that money. How do you do it? It's fairly simple.
How to Budget: The Dummies Guide
- :: Step 1: Write down EVERYTHING you have to pay for.
- :: ::: Write down everything you have to pay for- this includes electric bills, gas bills, cable bills, internet bills, water bills, rent, you name it. As well, figure out a general area of how much you pay for these- for example, if you tend to use from $200-$250 on your gas bill (which makes you fucking stupid), write down $250.
- :: Step 2: Write down a generalized list of what you want in the future, broken down by priorities.
- :: ::: Basically, go write down some shit you want in a year to two years. Start off with "small things" like "A cup of Starbucks coffee every week" to "A new PC" or something of that nature. Write down the price for each of those, too.
- :: Step 3: Figure out your monthly income.
- :: ::: Most Anonymous-es should be able to get this easily, as most people, even on a corporate level, are paid every two weeks. Just figure out how much you earn on average every month. Add all this up AFTER taxes and the like- basically, what your "take home pay" is.
- :: Step 4: Figure out what percentage of your paycheck goes to your bills.
- :: ::: For example, if I'm making $1000 every month (lol), and I pay $400 in bills, 40% of my income is going to bills. That means that I have 60% "Free" money to play with. This is just a bit of math, suck it up.
- :: Step 5: Account for your IRA and that kind of crap.
- :: ::: Protip: Figure it out where you can contribute the full $4k to your IRA. I'll go into more detail why in another lesson, but the long story short is that you need to be putting a substantial percentage into your long term savings account(s). This includes IRAs and 401-ks. Going with my example above, I'd maybe put in 10% toward my savings- like $70 into my IRA and $30 into savings. This wouldn't hit my $4k limit on IRA contributions, but considering I'm only making $12k a year in this example, that's a fucking lot.
- :: Step 6: Have fun with the remainder of the money.
- :: ::: Feel good about yourself! By budgeting that out and figuring out percentages, you just happily (and guilt-free) allocated yourself a percentage of your paycheck to do anything you want with. You've got your future covered, your electricity, and now you can go buy a 12 year old boy off the street to wear girl's clothing and suck you off. In my example, I did 50%- that's pretty big just for "lol spending" money- hey, $500 can be used to do a lot of things.
What We Just Did
Like I said above, budgeting is cutting your income into little bits and pieces to make room for all your miscellaneous expenditures. By doing it, you allow yourself to grab control over what you're making, and actually get an idea of what you're actually making and spending in life- instead of finding yourself strapped for cash every so often. It sounds kinda geeky, but trust me- by budgeting even for a year, you will find yourself in better financial situation than about 90% of the world, thus making you that much better.
But, of course, your experience is going to be much different than that I mentioned above. So, to make life easier on you, I'll break budgeting down into a few key points, in which you can run from there:
KEYS TO BUDGETING
- :* Allocate your bills first. Remove what you automatically pay first. It won't go away anyway.
- Try to cut out stuff you don't need. You'll probably realize with budgeting how much extra cash you spend on stupid shit, like MMORPGs or something like that. If you don't need it, cut it out- it'll free up cash.
- ALWAYS save money in both a long term savings account and an IRA. An IRA, as I will explain later, is basically free money (especially if you're low-income and you're using a Roth IRA, blah blah...). A savings account is ABSOLUTELY necessary because it will save your ass if you come into trouble. If not? Use it for a vacation.
- Avoid underestimating costs. You will probably use no gas for heating in the summer. Expect to use a fuckton in the winter. Always give yourself some elbow-room in your budget for your bills- and if you have extra cash, party!
- Keep to it. This is the biggest deal. Getting lazy WILL end up throwing you into financial hell. Don't do it.
LESSON 2: Banking Institutions
Angry threats from an ex-bank employee
Okay, let me get these things out of the way. Your experience will be much better banking if you DO NOT DO THE FOLLOWING THINGS:
- Walk in with a check expecting tellers to figure out where to deposit it. Even the smallest of banks have hundreds of thousands of customers. Most mistakes are made when you don't know what you want.
- Threaten bank employees. Trust me, the ladies behind the teller windows are fucking evil and will "get" you.
- Keep less than a minimum balance in any account. Banks will charge. And they will charge often, just because they won't like you.
- Write a NSF check post-dating it. Just because you THINK you will have the money in two days does not mean you will. Most tellers will not notice a post-dated check, and the check will bounce. And then, you will be torn apart limb from limb with fees.
- Attempt to draw money out of a CD or IRA. Just don't. You may be able to depending on the CD/IRA, but it will essentially destroy any interest you will have ever earned.
- Open a checking/savings account without checking competitor rates. Trust me, if they don't tell you their competitor rates (usually to show off their better rates), most likely they are getting their asses kicked.
- Hold over $100,000 in a checking/savings account in one bank, especially if it's a small bank. The FDIC will only cover you up to $100,000- so if you have more than that, split it up into different banks. The FDIC will rarely, if ever, cover anything above that- the only times they do so are when they are feeling generous or something.
- Bank with any kind of bank that is obviously dying. The best way to tell that is a bank that is giving insanely high rates for no reason, or just one that is situated in a damn back alley. Avoid them.
- Accept checks from the mail from strangers. This is a basic one. If you don't know where the check is from but it's made out to you, don't deposit/cash/anything it. If they ask for money back, RUN.
LESSON 3: Saving Up For Stuff
Buy the book The Richest Man in Babylon, or find a copy online. It's a good book that's been around since the 1920's, and will drill into your head the basic outline of becoming wealthy:
- Earn more than you spend
- Save the remainder (preferably a managed fund, Roth IRAs are good and the only decent thing to come out of Delaware)
- Live off the interest of your savings
If you get a big enough stash of savings, you'll be able to outpace inflation and live comfortably, and maybe pass some on to your children, who will probably spend it irresponsibly
LESSON 4: Stocks, Bonds, Mutual Funds and Hedge Funds
DO IT FAGGOT
LESSON 5: How Not To Be A Fucking Idiot
TIPS FOR THE STUPID
- Anyone who promises you lots of cash from work-at-home deals is lying. 'nuff said.
- Credit Unions ALWAYS > Banks- if you can get in. Credit Unions are much better and tend to offer better rates when it comes to CDs and Savings (and even interest-collecting Checking accounts), but you have to be eligible, among other things. Kinda a pain sometimes. Sometimes your place of employment has an agreement with a local credit union. Do some research.
- If your employer has a 401k matching program, FUCKING TAKE IT. A 401k matching program is where your employer puts the exact money you put into your 401k INTO YOUR 401K. Meaning? If you put in $200 and they put in $200, you get $400 in your 401k. Do it.
- If you have a low tax bracket and are eligible, go for a Roth IRA (instead of a Traditional). In the end, you will cheat the tax man, so long as you make more money in your 60s than you do right now.
- Ditch your credit card. Credit cards are made to make you spend more than you can afford: otherwise, the banks make no money. Therefore, if you have one, keep the limit extremely low and use it only if you have to. Debit cards are superior, so long as they are accepted wherever you go (most function as credit cards anyway- just hit "cancel" when it requests you to enter in your PIN).