Being financially savvy

Ever since I’ve been supporting myself on the income that doesn’t come from SSI, VR, or my parents, I’m learning a whole lot about the game of finance. It’s one of the first things you’ll face once you step out of college and into the real world, with no one backing you but yourself. Housing rent, car loan, groceries, buying things that you’ll never buy if you were 60 years old, etc. If you live in DC like I do, it sucks to learn that it’s nearly impossible to find a house or a condo under 150k (hey! I hail from Illinois, known for its never-ending cornfields), thus, I have to rent a place till I know for sure that I’m gonna live here for the rest of my life (I sure hope not.) That leaves the question when I’ll ever own a place someday….

I’ve always strived to be knowledgeable about things—I don’t mean in a way that I think I know everything—just being in the know. Thus, I read, study, ask questions, ponder abt things, talk with friends over certain subjects, that contributes to the learning process and like Gandi said, you never stop learning. So, lately, I’ve been reading nonfiction, mainly on finance. Why is that? Well, if you want to continue working well into your seventies, please do help yourself. I sure don’t. To do that, I have to reduce my spending and save money. After reading “the Next-Door Millionaire” book, I discovered that I’m an under-performing accumulator. It means that I’m not saving as much as I should and that I’m spending too much, or like the book said, not frugal. The author in the book said that those who are millionaires don’t even have six figures income, they do it by being frugal or PAW ( Prodigious Accumulator of Wealth). They save whatever income they have and minimize their spending. Over time, they build up a million dollar nest egg and once their mortgage has been paid off, they say good-bye to their work. Sounds nice, doesn’t it? Now, I know a friend who’s a year younger than I am and she has already saved nearly a half hundred thousand dollars. That pisses me off…

So, if you want to get off to a good start, and that you’ve read this far, I have some good news to tell you. I realize I’m not the only one who seems “obsessive” about his finance and there’s tons of blogs that are almost completely devoted to accumulating wealth and to retire with a million dollar by the time s/he is 50 years old. That makes me feel somewhat better and not too nutty. Yahoo! lists the top ten money blogs here. That’ll give you a good idea of what’s their goals and what they’re writing about.

“What? is that the good news?” you might ask. No no, the good news is THIS. Need an interpretation of that? Simply said, you get 5% cashback at supermarkets (Giants, Safeway, etc), drugstores (CVS, Walgreen, etc), and gas stations and 1% at any other places. Those places make up, like, 80% of my whole expenses excluding the rent and car loan. If you were to spend $100 at those places, you get 5 dollars in return. How about $200? that’s 10 dollars. $500? 25 dollars. Now, you’re really getting something back! However, the big trick here is that you need to pay it off every month, otherwise, they’ll charge you 10% or more for it as an interest, which means you’re not getting advantage of the cashback (And they’re probably laughing at you for falling into that pitfall). That gets you down? Well, don’t forget you can ask for real cashback dollars, like at an ATM, at those places. Say bye-bye to those stupid bank fees!