Wayne does the money management

I always hear about people having a hard time managing their money and accumulating savings... I've never really had that problem, though to be fair I have been blessed with a good paying job and a supportive family.

Anyway, here is my money management strategy and it seems to work really well for me.

Accounts:
Checking
Savings
Rent / Emergency savings
Investments

I try to keep my checking as close to $2,000 as I can. The way this usually works is that I start the week with $2,000 in checking. I spend some amount of that money during the week, lets say $200. So, payday rolls around and my check gets deposited into my checking account. At this point I have some amount > $2,000 in checking. The next step is the important part: I immediately move whatever amount is greater than $2,000 in savings.

This leaves me again with $2,000 in checking. I chose $2,000 because it is significantly more than I usually spend during a week. This gives me breathing room in case something major comes up. The money that I move into savings I basically pretend does not exist. This keeps me from being tempted to spend it on stupid stuff. I have $2,000. I don't have good weeks or bad weeks, I just have $2,000. This leads to sort of a ratcheting up of savings. You gain a little ground each week and then refuse to give up any.

Of course life is not always that simple, which is where the other accounts come into play. Savings is what I view as the "Oh shit, something bad happened" account. I try not to ever dip into it, but if I had to it wouldn't be the end of the world. I try to keep this account above $2,000 but not more than $10,000.

The Rent / Emergency savings is my "Oh shit, things went really really wrong" account. I keep 6 months of rent payments in this account. This gives me breathing room to keep a roof over my head if I ever am out on my luck. This account is filled up after you have your $2,000 in general savings. After you get it filled to the 6 months of rent amount, you don't need to touch it again, except to maybe add to it if your rent / mortgage goes up.

When I get to the point that I have around $10,000 in my general savings account, I take usually $5,000 of it and buy shares of Index funds. You want to buy Index funds because they are based off how the market as a whole is performing, rather than you trying to pick specific companies that will do well. Index funds have also been shown to perform just as well if not better than Mutual funds over time. Plus Index funds have lower fees.

Anyway, the main point of the whole system is to have a maximum limit on your checking account (Also I don't use credit cards, I don't believe in buying things I can't pay for in cash). This keeps you from thinking "I have quite a bit of money right now, so its probably okay to splurge on this thing". No, you have $2,000. You have it every week and whatever you make over that goes into savings and you never look at it again. Except that when you do look at it, you notice the number is growing, which motivates you to find ways to spend less so the amount you have in savings grows.

So that's how Wayne dos the money management.

Wayne does the worrying

So in general I would say that I'm a pretty laid back and care free person. I live my life and don't worry about things much. But there is one thing that I come back to again and again. Health insurance.

I don't understand health insurance much. I haven't been to the doctor in 5? years. But I know you are supposed to have it. And I know the main way to have it is to have a big kid office job and have them pay for it. So here I am and I have my fancy job and it gives me insurance (that I don't use, but you're supposed to have it, so all clear). The problem though, my insurance covers me, but not my wife. Right now she is covered on her parents' insurance, but we are rapidly getting to the age where we can't do that anymore.

So then I start to wonder how we will do that. I could get it through work, but apparently if I did that it would be like $10,000 a year. Which is equivalent to 50% of our other yearly living expenses. I don't know what most people spend a year to be alive, but $10k a year to be covered in case you go to the doctor seems ridiculous. Especially when you are young and don't go.

Pretty sure I make too much to get the new government healthcare stuff, which is kind of lame because I'm pretty sure Amy is in the income bracket where she would be covered just fine by it.

So anyway, health insurance is dumb and it is basically the only expense in my life that I don't have a grasp on. And I don't like it.