Hi My Name Is Anu And I Am Terrible At Personal Finance #startup

It’s just one of the most depressing realizations of all time.  Ok to be fair, I can think of a few more depressing realizations, but still. Me and personal finance are not the best of friends.  In general I think that’s the case, but then working at a startup when income can be erratic? Yeesh.  I’ve been looking into this but nobody really talks about founder personal finance.  I guess because most founders have buttloads of savings coming into their startup? I don’t know.  But this was basically the first job I got out of college so really, all I came with was student debt (YAY).

I am in the process of learning things, but here is what I’ve come up with.

• The 6 month rule is scarily real y’all:  I took a look at when things started getting crazy, and I was fine until the point I planned it to be fine. But really, you need to add about 6 months of extra monthly budget to your plan (i.e. 6 months of you not getting any income).  I feel like that’s what it is in the startup world- take everything and add two quarters.
• If you didn’t get it that month, don’t spend it (no matter how soon you think you’re getting the money):  I think that’s the harshest truth.  Live within your means, even if you know you’re getting the money at some point.  The problem is you don’t exactly know when that point may be, and the extra interest you’re going to incur by putting it on a credit card is usually not going to be worth it.  Usually.  There definitely are exceptions, as always, but now that I’ve done the whole, oh I’m good for it it’s fine, swipe it…damn this interest is piling up…oh GOD I HATE THIS INTEREST MAKE IT STOP…I’m pretty sure I’ve got it out of my system and I’m over it.  Hopefully.
• Create a financial model, just like you do for your company:  I finally got around to making a payment schedule (so I know how much to have in my bank account on what date), projecting future expenses by category, estimating income, and getting my running balance.  Spontaneity is good, but not when it comes to spending and finance, turns out.  I just got down to doing it yesterday, and man I feel way less stressed knowing this information.  It at least, again, helps me make more informed choices.
• Keep track of what you spend on: This one I’m..still on the fence about.  I do it, and I like it, but…the data hasn’t been incredibly revealing yet.  I think I’ll have to keep doing it for some time to really see results.
• Know what you want to save for: I’ve found that saving for the sake of saving just doesn’t work for me.  By that I mean…if I don’t know what I’m saving it for, I just spend it. So I started planning, and creating different categories that motivate me to save.  Anything left over I can spend on what I want (i.e. clothes/shoes/eating out/whatever).  I got this strategy from Ramit Sethi’s book (which I highly recommend). I just got started with this, which means it’ll probably be tweaked.  But so far my categories include:
  • Travel
  • Gifts
  • Retirement
  • Parents retirement
  • Trading Accounts
  • Rainy Day Savings (6 months Cash)

I’ll be honest.  I feel somewhat ashamed that I haven’t figured this stuff out yet and I’m not on autopilot with most of this stuff like a boss, but…I’m not.  I think the only thing I can do is say ok Anu.  You’re not the greatest at this.  Lets work on getting better.

Yikes I have a long way to go.

Le Sigh.