OUT

  • Rent - Pick a place to live that’s relatively cheap.
  • Utilities - Use utilities like normal, somewhat conscious.
  • Food - Grocery shopping and eating out
  • Medical - Health insurance and typical expenses
  • Maintain - Transportation, Tools, Envs, etc.
  • Share - give to others

IN

  • Savings - The only budget number that actually matters
    • Banking - save your money in a bank
    • Investments - save your money in other things
    • Taxes - mandatory loan the gov pays back partially

Here’s how I actually budget: I pick a place to live that’s cheap. I minimize food spending, without sacrificing health. I pay whatever medical I need. I minimize maintenance costs. Sharing is variable.

The only number that matters is my savings rate. What percentage of my income do I save for later. All the other numbers just contribute to overall savings rate. Save more, more, more. To increase money, maximize earning and minimize spending

Banks, Investments, Accounts

  1. Emergency fund with 3-6 months worth of expenses in a high-yield savings account (SoFi?)
  2. 401K up to company match
    1. Roth or Traditional – Roth you pay taxes now. Traditional pays taxes on withdrawal. Both never pay taxes on earnings.
  3. Max HSA (if on a high deductible health plan)
    1. Triple Tax Advantaged – don’t pay taxes on money in or out, don’t pay taxes on earnings
    2. Treat as a retirement account, not a health account, because of the tax advantage – can take money out for any use after 65
  4. Choose between funding IRA/401K, then do the other
    1. Some IRA or 401K have better investment options…
  5. Brokerage Acct (Schwab) for more liquid funds in ETFs