| Here's my system: As a background, I have no debt right now but I did also use this system when I did. I use my credit card for everything I can (to earn points) and pay it off every month. I have several savings accounts with ING Direct that I use for various large regular or upcoming expenses, plus an emergency account. I have a hard time budgeting so rather than keep track of all my purchases, I just keep track of my accounts. I built a simple app (but you could probably use Mint.com or a spreadsheet) that displays the balance of each account. Accounts include: savings accounts, credit card, and retirement account. When I had a student loan that was listed here too. I rent but if I had a mortgage I would include the amount owing as a loan account and the estimated equity in the home as a "capital" account. All of these balances are totalled up and I can see my overall net worth (it's rough). When looking at this view, my goal is ultimately to raise the overall interest earned across all accounts. I also have a spreadsheet which acts as a checklist for my savings goals. A prioritized list of goals runs down the side and each column is a month. Every month I try to check off each goal. They are prioritized like so:
* Credit Card (balance = zero at least once)
* Chequing Acct. (Min. balance = $x)
* Taxes (x% of revenue set aside)
* Retirement ($x set aside)
* Vacation ($x set aside)
* Downpayment ($x set aside until I reach $x)
* New Car ($x set aside until I reach $x) I have an emergency account, but if I didn't it would be near the top of this list, probably just before retirement. Any large, non-necessary, one-time purchase is considered months in advance and added to the bottom of this checklist. Only when I've enough money saved will I purchase it. Them's the breaks. This checklist is easier than a regular budget. As long as my goals are realistic and I'm completing them, I have nothing else to worry about. If I regularly have trouble completing goals I can adjust the goals and/or my spending. I check in with these two documents about once a week. In terms of specific advice for your situation I would say... focus on eliminating your credit card debt before all other savings or debts. When that's done, make minimum payments on your student loan and build up a decent emergency fund. And only when that's done, split your payments between student loan, retirement savings, and other savings. |