Monday, April 25, 2011

Money 101

The past nine months have been full of milestones in many ways, but the biggest is that I am living on my own and supporting myself for the first time.  The most interesting part of this has been learning how to deal with money. Now, I have always been conservative with my money- I remember saving up for Barbie Dolls in my piggy bank at 7 years old and thinking when I had enough money to buy one (a whole 7 bucks!) that I was rich. I have always had a savings account and have worked since I was old enough to- starting in the snack bar at the pool the summer I turned 14 to lifeguarding the summers I was 15-17 and then working at Great Wraps and Cold Stone my senior year. In college I worked at UVA Catering (best job ever) and while at home I waited tables at Cheeburger. In grad school I waited tables at Brio until I got my current job last August. So I have always been a good worker, a good spender, but an even better saver. I was able to chip in to my three trips abroad (Italy/France in high school, Oxford in college and Italy this past summer) and I had enough money my last year in college to buy my car in cash. I also paid for all of my graduate school, though living at home saved me a ton of mulah (thanks M & D!).

I am the first to admit that I am also lucky. I may have always worked (luckily I am one of those people who likes working) but my parents also allowed me to save- they paid for all of college undergrad and all of my food (and even gas) until I got my job last August. I owe a lot to them. But I have also been smart with my money- I pay attention to how much things cost and always save. I set goals for myself and almost always get them. I do not waste my money if I can help it, and I try not to be too stingy.

But part of growing up and learning how to deal with money is taking risks with it and enjoying it. The past few weeks I finally decided I needed to do more with my money then have it sit in a savings account with little interest. Certificates of Deposit, which I did all through college, are pointless because interest rates are so low. And I know nothing about the stock market to do my own investing (but I am working on it). So I decided to consult my big bro who is very investment-savvy. The first thing I did was put my savings into a higher interest savings acount available online. I chose ING Direct, which is offering a 1% savings account, which is the best you can find right now AND is what I would get doing a CD anyways. Then he suggested I start a Roth IRA. I had looked into IRA's and was semi-knowledgeable about them. So I asked a few questions and opened one with Vanguard. Luckily, I did it right before the tax dedline, so I was able to contribute the maximum to the 2010 year along with 2011. I also did research with my work (which has a great retirement system) and found that they do NOT have cash match plans (bummer) with a 401k or a 457. So I decided to hold out on that and just focus on the IRA and high interest savings account for now. But I am more open to investing and doing things with my money instead of saving everything and just having it sit. I did make an early mistake of checking in on my IRA frequently only to find a week in that I had already lost $100. I have not looked since!

My dilemma, though, is that I tend to save a lot and allow myself little to spend. Then if I need to spend more one month, I often feel guilty. This is not a good way to go about life, because it is about living and enjoying yourself, so I am trying to work on that. I do enjoy traveling and will allow myself money to travel, but I have a hard time spending a lot out to eat or for entertainment on a weekly basis. I am a work in progress in many areas...but I do feel more aware and smart about my money now that I am doing something with it.
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